I have a lot of my utility money in pipelines. I think that sometime in the future I may have to move this money to other utilities. I do not think that the new types of power generation are going to go away. This company (TSX-AQN) might be a good investment at some time in the future. I recently read a report on this stock saying it will do much better in the future and that Emera is interested in buying shares in this company after the company completes its buy of two New Hampshire power utilities. Emera is a stock I own and follow.
This company, at the present time, does not have a good record to making money for its shareholders. Dividends have gone down more than up and have spent most of the time being flat. They took a dive again when this company went from an income trust to a corporation. The decrease was about 73%. Before I even consider this company, I would like to see some better dividend history. However, the current dividend rate of 4.9% is good.
The company has had some growth in earnings, revenues, book value and cash flow, but not on a per share basis. It is the per share basis growth that, as an investor, I like to see. Book value has gone up, but book value per share has gone down. Over the past 5 and 10 years, book value per share has declined at the rate of 11% and 8% per year, respectively. Cash flow per share, over the past 5 and 10 years has decline by 10% and 5.5% per year over the past 5 and 10 years.
There has been an average increase in shares of 16% per year over the past 10 years. Recently, they have raised capital, convert debentures to shares and bought assets. I do not that that all this really matters if I, as a shareholder, is not better off.
In looking at debt ratios, I find that the Liquidity Ratio is low at 0.44. This means that the current assets cannot cover current liabilities. However, the current liabilities included a portion of the long term debt. The company has arrangements to cover the long term debt and without that, the Liquidity Ratio is better, but not great at 1.02. The 5 year average for the Liquidity Ratio is just 0.92. The Asset/Liability Ratio is better at 1.55 with a 5 year average of 1.62. Both the Leverage Ratio and the Debt/Equity ratios are ok at 2.18 and 1.81, respectively.
The Return on Equity for the financial year ending December 2010 was 5.6%. The 5 year average ROE is 4.4%. Over the past 10 years, shareholders would have made a return of around 4% per year, with dividends providing around 10.5%. This, of course, points to the fact that the stock price is lower now that it was 10 years ago.
Tomorrow, I will look at what the analysts say about this stock and what the spreadsheets says about the current stock price.
APUC owns and operates a diversified portfolio of clean renewable electric generation and sustainable utility distribution businesses in North America. Liberty Water Co., APUC's water utility subsidiary, provides regulated water utility services. Through its wholly owned subsidiary Liberty Energy Utilities Co., APUC provides regulated electricity and natural gas distribution services. Algonquin Power Co., APUC's electric generation subsidiary, includes renewable energy facilities and thermal energy facilities. Its web site is here Algonquin. See my spreadsheet at aqn.htm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.
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