In Late July, Canadian utilities company Algonquin Power and Utilities Corp. (TSX:AQN) (NYSE:AQN) announced a partnership with American energy company Chevron (NYSE:CVX) to co-develop renewable power assets. Given the different nature of the respective companies’ business models, at first glance they may seem like an odd couple.
That said, in the article, I’m going to highlight why I believe this partnership to be extremely bullish for Algonquin investors.
To start, it is clear to me that this partnership conveys a bullish signal that energy players such as Chevron view not only renewable power as a necessary portfolio position for long-term growth, but also that Algonquin knows what it is doing in this sector.
Algonquin’s impressive portfolio of renewable assets, which now makes up about a quarter of the company’s overall business, has provided investors with incredible growth of late and exposure to this strong and accelerating secular growth trend.
Secondly, I think this partnership indicates the fact that many renewable power assets remain undervalued by the market on their own, or as potential acquisition targets. Given the strength of Algonquin’s mergers and acquisitions (M&A) team and the disciplined approach Algonquin has taken over the years to acquire and integrate said assets into its portfolio, investors should take solace in the partnership and it affirms the value Algonquin continues to provide long-term investors.
Invest wisely, my friends.
