Algonquin Power & Utilities Stock Crash: Is it Time to Buy?

Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) is an Oakville-based company that owns and operates a portfolio of regulated and non-regulated generation, distribution, and transmission utility assets. Shares of this green energy stock have plunged 31% week-over-week as of close on November 16. The stock is now down 43% in the year-to-date period.

The catalyst for the stock’s crash was the release of the company’s third quarter fiscal 2022 results before markets opened on November 11. Total revenue increased 26% year-over-year to $666 million. Meanwhile, it posted adjusted EBITDA growth of 10% to $276 million. However, Algonquin also posted adjusted net earnings of $73.5 million or $0.11 per common share – down 25% and 27%, respectively, compared to the third quarter of fiscal 2021.

This company was weighed down by higher interest expense of $23.3 million due to borrowings to support growth and higher interest rates. It also suffered due to lower recognition of investment tax credits and production tax credits of $17.1 million.

Looking ahead, Algonquin reduced its adjusted net earnings per share forecast from a range of $0.72 to $0.77 to a range of $0.66 to $0.69. This is due to challenging macroeconomic conditions, construction delays for its renewable projects, and delays that have been exacerbated by interest rate conditions.

Shares of Algonquin currently possess a Relative Strength Index (RSI) of 19, which puts this stock in technically oversold territory. Meanwhile, the stock last had a solid price-to-earnings ratio of 26. It offers nice value at the time of this writing. Better yet, Algonquin pays out a quarterly dividend of $0.181 per share. That represents a monster 9.3% yield.