The market closed near 20,000 today. It’s insane what’s been going on with the market the past few months. I keep waiting for a huge correction, meanwhile stocks keep going up and up. I’m still holding true to my prediction that we will see a sizable correction sometime in Q1. I figured if you can’t beat them join them. I bought shares of Algonquin Power & Utilities Corp.
I paid $8.58 per share, times 250 shares, for a total purchase price of $2,145. At current yield, my annual dividends from this purchase should increase by $105 dollars.
Algonquin Power & Utilities Overview
Algonquin Power & Utilities Corp. is a Canada-based company engaged in owning and operating a portfolio of regulated and non-regulated generation, distribution and transmission utility assets. Algonquin Power & Utilities operations are organized across three business units consisting of Generation, Transmission and Distribution.
The Generation Business Group (Generation Group) owns and operates a portfolio of non-regulated renewable and thermal electric generation utility assets; the Transmission Business Group (Transmission Group) is responsible for evaluating and capitalizing upon natural gas pipeline and electric transmission asset opportunities in North America, and the Distribution Business Group (Distribution Group) owns and operates a portfolio of North American electric, natural gas, and water distribution and wastewater collection utility systems. The Generation Group has interests in hydroelectric, wind, solar and thermal facilities.
Algonquin Power – The Generation Group
Algonquin Power is the clean energy portion of the company. Clean energy is energy produced from clean and renewable resources, with limited environmental impact. Algonquin produces Clean Energy using both renewable and thermal technologies. Algonquin Power operates 33 assets throughout Canada and The United States. These assets use solar, hydro, wind, and thermal to generate power. A full list of assets and their descriptions can be found here.
Liberty Utilities – The Transmission and Distribution Groups
Liberty Utilities is a regulated water, wastewater, natural gas, electric and propane utility company. The company services customers in various areas of the United States.
Liberty delivers natural gas to 6 states Georgia, Illinois, Iowa, Massachusetts, Missouri and New Hampshire. The serviceable customer count is 290,000.
Liberty Utilities provides electricity to 100,000 customers in two states; New Hampshire and California. Liberty has broken ground on a 50MW solar farm. This new asset will deliver clean energy to about 25% of its customer base.
Water And Wastewater
Liberty Utilities delivers drinking water to 170,000 customers in the following states: Arizona, California, Texas, Missouri, Montana, Illinois, and Arkansas.
Liberty Utilities delivers gas that is a mixture of propane and air through an underground pipeline system directly to 1,200 customers in New Hampshire.
Algonquin Power Dividends
The chart below is a breakdown of Algonquin’s dividend yield, payout ratio, dividend coverage ratio, and its 3 & 5 year dividend growth rate. Algonquin has an impressive 5-year dividend growth rate of 15.2%.
The image below is a visual representation of the past 7-years of dividend income.
Dividend payments over this time period can be found below. Please note, dividends were paid monthly until 2010. I wish they still were.
Algonquin Power Takeaways
What I like about this purchase is that I have very little exposure to power generation and transmission in my portfolio. This purchase helps to offset my heavy exposure to REITs and Biotech. I also like that Algonquin focuses on green renewable energy. I like the company’s growth so far and its future expansion plans. And of course, I like the dividend yield. 🙂
What I don’t like about this purchase is my fear that the new Trump administration will make it difficult for green players. New regulations could hurt Algonquin’s future expansion. I’m also nervous about interest rate hikes, which could be just around the corner. Rate hikes traditionally hurt utilities. These risks are not enough for me to not buy this stock.
What do you think of my Algonquin Power stock buy? Are you an AQN shareholder? Are you buying or selling any stock right now?