Algonquin Power & Utilities Corp. demands patience while collecting a 4.93% dividend yield

May 20th, 2016 – 1 Comment

Chewing down a $3.4 billion acquisition


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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AQN LOGO

Hi Lou

I know that you looked at Algonquin about 2 years ago. Would you consider looking at it again to see if there have been any changes

Thanks,

Peter

 

Hey Peter,

Thanks for the assignment. I am always happy to take another look at a stock. In fact if it’s a stock that I own – I track it three times a day! Keep in mind that what I do on behalf of listeners and readers is to take a snapshot at a specific period of time. It is incumbent on the individual to monitor their investments and decide if its a buy, a sell, or a hold over their investment horizon. As we all know things can change very quickly in the investment universe. We need to pivot when we get new information.

This will be the third time since 2013 that I examine the charts for Algonquin Power & Utilities Corp. (AQN TSX). The last time was on August 11, 2014 when the shares were trading for $7.64 and the dividend yield was 4.45%. Zach wanted my thoughts and the research indicated that the stock had an intact uptrend line, support along the 50-day moving average, and was operating under the influence of a golden cross.

The shares were trading sideways in a tight range but with the yield in mind it was advised to be patient while collecting the dividend. In hindsight that was the right call with AQN running to $10.00 by February of 2015.

Another inspection will contribute texture to your decision making.

 

AQN

The three-year chart indicates that AQN built a base at $9.00 from June of 2015 to October of 2015 where it caught a lift to its 52-week high to $12.01 by January of 2016. The MACD and the RSI both generated sell signals as the stock pulled back from the high but it was a fast and furious retreat to $10.30 in a move that was concluded in three days. The catalyst for the retreat was the announcement of a $3.4 billion acquisition.

 

 

 

 

AQN2

The six-month chart  illustrates the buy signals from the momentum indicators in April followed by an advance where they became overbought in May near $11.50. The pullback on May 17 was the result of a block of 50.1 million shares selling for $10.85. The dividend yield is currently 4.93%.

From the research conducted there hasn’t been any changes in the stock. Management continues to make acquisitions which have to be integrated and paid for but thats been the business model from the beginning. Business as usual from my perspective.

 

Next time I will re-run the charts for Labrador Iron Ore Royalty Corp. (LIF TSX) for Max.

 

Make it a profitable day and happy capitalism!

Categories: Utilities
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