Just discovered (single stock prospect: AQN)

Crash

Algonquin Power and Utilities. Difficult to tell whether it's a US corp or Canadian. HQ in Ontario, but everything is reported in US dollars (?) I've just begun to delve. I never heard of this company before. Is it a gem amid the rubble? Seems "fairly valued" right now, to Morningstar, at least. So, no bargain at the moment. I glanced at their corporate website. I think they are HEAVILY into wind-power. Solid earnings, eh? They have a DRIP, but you must already own shares to get in.
https://www.morningstar.com/stocks/xnys/aqn/quote
https://algonquinpower.com/

Graust

@Crash (and others)—they also have two preferred shares, AQNA (~6.2% yield) and AQNB (just over 5.5%), that offer yields above the common (which yields 3.94%). The -A preferred is call protected until 2023, at which time it will either float its dividend rate, or be called, and the -B preferred until 2024. Just a couple of options to consider

I think utilities that are already into renewables, such as AQN, will be rewarded in the future, as they will be ahead of the curve, similar to TSLA having a very large head start over the traditional car makers. Some others to look at are NextEra Energy, NEE, and Dominion, D, which sold off a pipeline last year in an effort to pivot to more “green” power generation/distribution.

I had forgotten about AQN, Crash....thanks for bringing it up! And not trying to take over the thread, but the “renewablization” of utilities is something I think the 2020’s will bring also!

Crash

@Graust, thanks for the note. Interesting information.

AndyJ

I like the notion of investing in semi-traditional utes moving significantly into renewables. Thanks for the idea.

Mark

@Crash - Why not AY?

catch22

No longer valid/unrelated to discussion.

johnN

We recently bought ENB another good long term Canadian Energy pcompany/ reasonable yield
Kind regards

Mark

@Crash - AY is the ticker symbol for Atlantica Sustainable Infrastructure (formerly Atlantica Yield)

AndyJ

Mark said:

Why not AY?

If you follow it, @Mark, is Atlantica's greater volatility from the Africa and South America exposure generally? Currencies?

I wonder if it could be sort of a proxy for an EM allocation.

Mark

@Andy - Although those two issues, foreign investments & currencies, are always and issue I believe most of the volatility is a matter of energy source i.e. alternative v. fossil fuels (notice the spike after the presidential election).

Long term I do not count on a whole lot of growth in terms of share price but rather a steady source of distribution income. I also believe in the long term trend of a gradual shift to alternative energy sources. Also, their water holdings could come into greater play as time goes on.

AndyJ

@Mark: Some of the straight utes with renewables have for sure been less volatile than the renewable equity etf's. I sold ICLN when it changed direction, and boy did it plummet. So rather than catch the falling knife there, I've started looking for something less volatile as a renewables investment, with a total return focus.

Looking at specifically at AY and AQN, AY has been more volatile at least recently, and the one obvious difference is the Africa-South America vs. North America geography. But the AY yield is better; I can see if income's the focus, that'd be the place to be vs. AQN.

I'm adding AY to the watchlist to see how it might work as an EM proxy with a good yield.

Thanks, AJ

Crash

I will look at AY, too.

Graust

Not to be too incredibly derivative, and this was from a post from the great Chowder, of Seeking Alpha (and the “Chowder Number,” or dividend yield plus growth) fame, and its slightly dated (especially after a run up in utilities over last few weeks) dated 2/28, but its related to discussion:

[Quote] On the dividend front, I have declared tomorrow as Utility Monday. I will be adding to the following utility companies.

AWK .. BEPC .. NEP .. WEC .. RNRG .. XEL.

Most of the focus here is on clean energy.

Utilities seem to be undervalued to me and they can almost be considered growth assets going forward just to achieve new price highs. Although D is a favorite best-in-class at JP Morgan, I already own a large amount of them and would prefer building the other utilities up in size.

A news blurb from Barron's:

Utility company stocks ( XLU, VPU) and funds are a cheap way to plug into the seismic shift away from coal and toward wind and solar power over the next 15 years, providing a potential boon to both the environment and investors, according to the latest Barron's cover feature.

"Utilities are a stealth green energy play, with much lower valuations than most alternative-energy providers and less risk," says Hugh Wynne, co-head of utilities and renewable energy research at SSR.

The conventional view is to buy tech or renewable companies as a way to participate in the energy transition, but the "most efficient and optimal risk-adjusted manner to participate in the energy transition is through well-run electric utilities," says George Bilicic, vice chairman of investment banking at Lazard.


Barron's identifies companies that offer attractive yields and inexpensive valuations, including Alliant Energy (NASDAQ: LNT), American Electric Power (NASDAQ: AEP), CMS Energy (NYSE: CMS), Dominion Energy (NYSE: D), Entergy (NYSE: ETR), Exelon (NASDAQ: EXC), NextEra Energy (NYSE: NEE), Pinnacle West Capital (NYSE: PNW) and Xcel Energy (NASDAQ: XEL).

Morgan Stanley analyst Stephen Byrd favors American Electric Power, which he calls a "coal-heavy company that is moving away from that in a big way" and thinks the stock, which is down 20% in the past year, could rise as its transformation continues.

Reaves Asset Management's John Bartlett says CMS Energy is "cleaning up its emissions, while holding increases in electric bills to around the rate of inflation."J.P. Morgan's Jeremy Tonet likes Dominion as a "best-in-class, pure-play regulated utility with attractive green growth plans," and Entergy, which has one of the best hydrogen logistics networks on the Gulf Coast. [End quote]

BEPC (Brookfield Renewable Resources, not K-1 issuing)....NEP (yieldco like AY)....CWEN/CWEN.A (another yieldco)....NEE (utility sponsor of NEP, and the leader in renewable utilities). Also HASI, a REIT that serves renewable energy projects. These are some other ideas. NEE has a yield around 2%, BEPC and HASI about 2.5-3%, NEP about 3.5%, and CWEN almost 5%. May be getting a little far afield for @Crash

Crash

Hey, man. That's a lot to chew on. I appreciate the meaty read. I note that AQN is nowhere on those lists. At any rate, I won't be buying anything until there's a pull-back. The latest hiccup seems to be just that, to me. Nothing to worry about, actually. Unless it continues for a period of time.