Is it a good company at a reasonable price? This company’s financials and dividend payments are in US$. I can see why analysts are giving this a recommendation of Hold. Preferably you want to invest in a company with increasing dividends. It is never a good sign when a company decreases the dividends. I know that I was saying that this stock price is probably reasonable, but when a company has financial problems to work out you want to buy the stock when it is cheap. Analysts expect the stock price to go down in the near future.
I do not own this stock of Algonquin Power & Utilities Corp (TSX-AQN, NTSE-AQN). This is a dividend paying utility stock. I got it off a list of dividends paying utility stocks. Also, I own Emera Inc. and this company owns shares in Algonquin Power.
When I was updating my spreadsheet, I noticed Revenue, EBITDA etc. went down in 2024 and values for 2023 and 2022 were adjusted to lower levels. This seems to be because the company sold their Renewable Energy Business. See press release on Newswire. I did not adjust past years. My spreadsheets look at data for much longer than the last 2 years. I always use original reporting figures unless there is a very good reason not too.
If you had invested in this company in December 2014, for $1,002.56 you would have bought 104 shares at $9.64 per share. In December 2024, after 10 years you would have received $703.74 in dividends. The stock would be worth $663.52. Your total return would have been $1367.26. This would be a total return of 4.14% per year with 4.04% from capital loss and 8.18% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $9.64 | $1,002.56 | 104 | 10 | $703.74 | $663.52 | $1,367.26 |
The current dividend yield is moderate with dividends currently declining. The current dividend yield is moderate (2% to 4% ranges, at 4.43%. The 5 year median dividend yield is good (5% to 6% ranges) at 6.45%. The 10 year median dividend yield is moderate at 4.72%. The historical median dividend yield is high (7% and above) at 7.14%. The dividends have recently been cut. Since 2023, the dividends have been cut by 64%. The cuts were 40% in 2023 and another 40% in 2024. Analysts expect the current dividends to be flat over the next 3 years.
The Dividend Payout Ratios (DPR) need improving and analysts expect it will. The DPR for 2024 for Earnings per Share (EPS) is non-calculable due to earnings losses with 5 year coverage the same. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is too high at 130.17% with 5 year coverage at 102.37%. The DPR for 2024 for Cash Flow per Share (CFPS) is too high at 46% with 5 year coverage at 54%. The DPR for 2024 for Adjusted Funds from Operations (AFFO) is fine at 56% with 5 year coverage at 54%. The DPR for 2024 for Free Cash Flow (FCF) is non-calculable due to earnings losses with 5 year coverage the same. There is no agreement on FCF except all sites think it is negative. Analysts expect that the DPRs will improve in the future.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 0.00% | 0.00% |
| AEPS | 130.17% | 102.37% |
| CFPS | 46.00% | 54.12% |
| AFFO | 55.58% | 53.74% |
| FCF | 0.00 | 0.00% |
Debt Ratios are need improving and the debt level is high. The Long Term Debt/Market Cap Ratio for 2024 is too high at 1.82 and currently at 1.35. The problem is, of course, fall stock prices. A good ratio is 0.50. The Liquidity Ratio for 2024 is too low at 0.76 and 1.16 currently. If you added in Cash Flow after dividends, the ratios are still low for 2024 at 0.89 but they are fine currently at 1.53. The Debt Ratio for 2024 is good at 1.57 and 1.60 currently. The Leverage and Debt/Equity Ratios for 2024 is too high at 3.75 and 2.38 and currently at 3.03 and fine at 1.86. These values need to be below 3.00 and 2.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term | 1.82 | 1.35 |
| Intang/GW | 0.40 | 0.31 |
| Liquidity | 0.76 | 1.16 |
| Liq. + CF | 0.89 | 1.53 |
| Liq, CF DB | 1.24 | 4.48 |
| Debt Ratio | 1.57 | 1.60 |
| Leverage | 3.75 | 3.03 |
| D/E Ratio | 2.38 | 1.89 |
The Total Return per year is shown below for years of 5 to 27 to the end of 2024 in CDN$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2019 | 5 | -4.28% | -12.74% | -18.97% | 6.22% |
| 2014 | 10 | 4.65% | 4.14% | -4.04% | 8.18% |
| 2009 | 15 | 5.84% | 12.46% | 3.01% | 9.46% |
| 2004 | 20 | -2.43% | 4.45% | -2.49% | 6.94% |
| 1999 | 25 | -1.87% | 7.46% | -1.39% | 8.85% |
| 1997 | 27 | -1.51% | 6.41% | -1.81% | 8.22% |
The Total Return per year is shown below for years of 5 to 21 to the end of 2024 in US$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2019 | 5 | -6.22% | -14.36% | -20.65% | 6.29% |
| 2014 | 10 | 2.42% | 1.89% | -6.02% | 7.91% |
| 2009 | 15 | 3.61% | 10.32% | 0.95% | 9.37% |
| 2004 | 20 | -3.30% | 4.14% | -3.34% | 7.48% |
| 2003 | 21 | -1.85% | 5.29% | -2.83% | 8.11% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 7.99, 10.37 and 12.75. The corresponding 10 year ratios are 21.92, 24.69 and 27.46. The corresponding historical ratios are 23.61, 27.16 and 30.32. The current P/E Ratio is 19.57 based on a stock price of $8.02 and EPS estimate for 2025 of $0.41 ($0.30 US$). The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 14.32, 17.86 and 22.15. The corresponding 10 year ratios are 15.82, 18.85 and 21.98. The corresponding historical ratios are 16.54, 19.85 and 22.15. The current P/E Ratio is 18.94 based on a stock price of $8.02 and EPS estimate for 2025 of $0.42 ($0.31 US$). The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $8.74. The 10-year low, median, and high median Price/Graham Price Ratios are 1.00, 1.17 and 1.37. The current P/GP Ratio is 0.92 based on a stock price of $8.02. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Book Value per Share Ratio of 1.62. The current ratio is 1.00 based on a Book Value of $4,509.8M, Book Value per Share of $5.87 and a stock price of $5.85. The current ratio is 38% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$ and you will get a similar result in CDN$.
I also have a Book Value per Share of $6.27 for 2025. This analyst calculates the Book Value differently that I do and, in this case, the 10 year median P/B Ratio is 1.54. This implies a P/B Ratio is 0.93 with a Book Value of $4812M and a stock price of $5.85. The current ratio is 39% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$ and you will get a similar result in CDN$.
I get a 10-year median Price/Cash Flow per Share Ratio of 10.11. The current ratio is 7.91 based on Cash Flow per Share estimate for 2025 of $0.74, Cash Flow of $541.5M and a stock price of $5.85. The current ratio is 22% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$ and you will get a similar result in CDN$.
I get an historical median dividend yield of 7.14%. The current dividend yield is 4.43% based on dividends of $0.36 ($0.26 US$) and a stock price of $8.02. The current dividend yield is 38% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. (Note that I have 26 years of data for CDN$ dividends and only 21 years of data for US$ dividends. Testing is different in US$.)
I get a 10 year median dividend yield of 4.79%. The current dividend yield is 4.43% based on dividends of $0.26 US$ and a stock price of $5.85. The current dividend yield is 7% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. You will get a similar result in CDN$. There is a problem with this test as dividends are declining and this test works best with increasing dividends. Decreasing dividends are not a positive.
The 10-year median Price/Sales (Revenue) Ratio is 2.80. The current P/S Ratio is 1.86 based on Revenue estimate for 2025 of $2,419M, Revenue per Share of $3.15 and a stock price of $5.85. The current ratio is 34% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is probably reasonable. This is based on the P/S Ratio testing and considering the dividend yield testing. The P/S Ratio test says that the stock price is cheap, but the dividend yield testing says the stock price is expensive. A number of tests say that the stock price is cheap and a number says reasonable, but above the median.
When I look at analysts’ recommendations, I find only Holds (12). The 12 month stock price target is $7.21 ($5.28 US$) with a high of $7.96 ($5.83 US$) and low of $5.86 ($4.29 US$). This implies a total loss of 5.65% with 10.08% from capital loss and 4.43% from dividends based on a current stock price of $8.02.
Analysts on Stock Chase generally like this stock in 2025. There is one Do Not Buy and they do not like this stock because of missed EPS and Revenue estimates in 5 of past 8 years. Christopher Liew on Motley Fool thinks this stock is a strong buy for a pure-play utility under $10. Puja Tayal on Motley Fool thinks this is a stock to avoid. The company put out a press release via Business Wire about its fourth quarter of 2024. The company put out a Press Release for their first quarter of 2025 results.
Simply Wall Street via Yahoo Finance says it is hard to get excited about this stock. Simply Wall Street has 3 warnings on this stock of interest payments are not well covered by earnings; dividend of 4.42% is not well covered by earnings or free cash flows; and large one-off items impacting financial results.
Algonquin Power & Utilities Corp is a Canada-based diversified international generation, transmission, and distribution company. It has operations in the United States, Canada, Bermuda, and Chile. Its web site is here Algonquin Power & Utilities Corp .
The last stock I wrote about was about was Sylogist Ltd (TSX-SYZ, OTC-SYZLF) ... learn more. The next stock I will write will about be Goeasy Ltd (TSX-GSY, OTC-EHMEF) ... learn more maybe on Sunday, June 15, 2025 around 5 pm.
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