Where did the asset impairment charge come from? According to the company’s press release, it pertained to four Texas wind farms. But it wasn’t any bigger than the average utility company‘s increase in interest expenses last year. Granted, it was a large increase in interest expense itself: that category was up 33% in 2022 (‘up’ as in further from zero, an expense account going up in this sense is bad). The $69 million increase in interest expenses was not that big of a factor. Close to all utilities saw interest expenses increase last year, if any didn’t it was because their debt was fixed rate and didn’t have to be refinanced. A $69 million increase in interest expenses was a factor too, although I do not think it was as big of a factor as it was made out to be in the company’s Q3 2022 earnings results. Here I speak of the portion of earnings owned by shareholders, “net income available to common shareholders.” That declined, mainly due to a $150 million asset impairment and $75 million decline in the fair value of assets. However, earnings were negative to the tune of $212 million. The full year delivered the customary growth in revenue and cash from operations (CFO) that investors have become accustomed to. In Q4, the company delivered more lacklustre earnings and cut its dividend. In Q3, the company showed declining earnings. The reason why Algonquin stock crashed this year is because it performed poorly as a business, and cut its dividend. In this article, I will explore AQN’s prospects of righting its ship and returning the amount of wealth to shareholders that its current dividend yield implies it will. If the company can ‘get its groove back,’ then current shareholders will be handsomely rewarded. However, as a result of it having fallen so much, the stock now has a truly juicy 7.7% dividend yield. Algonquin has underperformed by a wide margin. In that period, it has fallen 17.3%, while the TSX utilities sub-index has merely fallen 11.8%. Written by Andrew Button at The Motley Fool CanadaĪlgonquin Power & Utilities Corp ( TSX:AQN) has been one of the worst performing TSX utility stocks over the last 12 months.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |