As far as renewables stocks go, Algonquin Power and Utilities Corp. (TSX:AQN)(NYSE:AQN) is among my top picks for investors. Among the many reasons to own this stock, Algonquin has one of the best. This stock is most advantageous for Canadian investors with extra yield due to currency differential, as well as geographical and currency-related diversification.
Algonquin’s geographical diversification comes from the fact that approximately 95% of the company’s revenue originates from outside of Canada (mostly in the U.S.). The vast majority of these assets are also regulated, providing Algonquin investors with a very high degree of cash flow certainty relative to its peers.
The company’s growth by acquisition model has allowed investors to reap the benefit of holding unloved assets in the utilities space at a low cost base with a management team that has proven to be world class at integrating acquisitions into the company’s business model.
This renewables play also includes a number of high-growth renewable energy projects, forcing investors to realize that some utilities payers can indeed grow. At 17 times earnings and 10 times cash flow, Algonquin is a defensive gem with some of the best fundamentals of its peers, and a great dividend to boot.
Invest wisely, my friends.
