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Algonquin Power & Utilities: Acquisition Indigestion


  • Algonquin Power & Utilities announced an acquisition that dropped its stock.
  • We look at what the company is buying and why it may appear at first glance to investors.
  • We dissect the valuations and tell you why this deal removes some upside potential in our view.
  • We tell you why we still own the stock and how we are playing it.
  • I do much more than just articles at Conservative Income Portfolio: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

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When we first covered Algonquin Power & Utilities (NYSE:AQN) we had a slight bullish slant on the stock. Our commentary explained it as follows.

We do own AQN which we bought on the TSX after the

Algonquin Power & Utilities market cap
Data by YCharts

AQN vs peers PE ratio
Data by YCharts

AQN vs peers dividend yield
Data by YCharts

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This article was written by

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The best way to provide income in today's markets while reducing risks

Conservative Income Portfolio is designed for investors who want reliable income with the lowest volatility.

High Valuations have distorted the investing landscape and investors are poised for exceptionally low forward returns. Using cash secured puts and covered calls to harvest income off value income stocks is the best way forward. We "lock-in" high yields when volatility is high and capture multiple years of dividends in advance to reach the goal of producing 7-9% yields with the lowest volatility.

Preferred Stock Trader is Comanager of Conservative Income Portfolio and shares research and resources with author. He manages our fixed income side looking for opportunistic investments with 12% plus potential returns. 

Analyst’s Disclosure: I/we have a beneficial long position in the shares of AQN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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