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1. Company Snapshot

1.a. Company Description

Algonquin Power & Utilities Corp., through its subsidiaries, owns and operates a portfolio of regulated and non-regulated generation, distribution, and transmission utility assets.The company operates through two segments, Regulated Services Group and Renewable Energy Group.The Regulated Services Group segment operates a portfolio of rate-regulated utilities located in the United States, Canada, Chile, and Bermuda.


Its utilities provide distribution services to approximately 1,093,000 customer connections in the electric, natural gas, and water and wastewater sectors The Renewable Energy Group segment generates and sells electrical energy, capacity, ancillary products, and renewable attributes produced by its portfolio of renewable and clean power generation facilities primarily in the United States and Canada.It owns and operates hydroelectric, wind, solar, and thermal facilities; and owns and operates a portfolio of clean energy and water infrastructure assets.The company was incorporated in 1988 and is headquartered in Oakville, Canada.

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1.b. Last Insights on AQN

Algonquin Power & Utilities Corp.'s recent performance was driven by its focus on strategic transitions and operational improvements for future growth, despite a dip in quarterly earnings. The company's emphasis on navigating the current market environment, coupled with its commitment to delivering long-term value to shareholders, is a positive development. Additionally, the company's ability to manage its debt and maintain a strong balance sheet is a key driver of its resilience in a challenging market.

1.c. Company Highlights

2. Algonquin Power & Utilities Corp. (AQN.TO) Posts Strong 2025 Results, Exceeds Guidance

Algonquin Power & Utilities Corp. (AQN.TO) reported a robust financial performance for 2025, with full-year net earnings per share of $0.27 and adjusted net EPS of $0.34, surpassing guidance by $0.02. The company's full-year GAAP net earnings stood at $208 million, a significant increase from $54.8 million in 2024, while full-year adjusted net earnings reached $258.8 million, up 17% from the previous year. The fourth-quarter adjusted net EPS was $0.06, remaining flat year-over-year. Notably, the actual EPS for the quarter was $0.08239, falling short of estimates at $0.11.

Publication Date: Mar -07

📋 Highlights
  • Adjusted Net EPS Growth:: Full-year adjusted net EPS rose to $0.34 in 2025, exceeding guidance by $0.02 and up 17% from 2024 ($0.29).
  • Operating Efficiency Gains:: Operating expenses as a percentage of gross revenue fell to 36% in 2025 from 38% in 2024, while earned ROE improved to 6.8% from 5.5%.
  • Debt Retirement & Capital Structure:: $1.6 billion from renewable business sale used to retire debt, improving financial flexibility and reducing leverage.
  • Capital Expenditure Plan:: $3.2 billion 3-year regulated utility capex outlook through 2028, driving rate base growth to $9.7 billion by 2028 from $8.2 billion in 2025.

Operational Highlights

The company achieved significant operational milestones, including reducing operating expenses as a percentage of gross revenue from 38% in 2024 to 36% in 2025 and improving earned return on equity (ROE) from 5.5% to 6.8%. These improvements were driven by the company's focus on cost discipline and operational efficiency. As the CFO, Rob, noted during the earnings call, the company is focused on "earning a fair return on invested capital," which is reflected in their capital plan.

Regulatory Developments and Outlook

Recent regulatory developments have been constructive, with supportive environments in Missouri, Arizona, New Hampshire, and Oklahoma, enabling enhanced investment recovery. The company is prioritizing operational and regulatory strategies, including centralized capital projects and improved customer experiences. Algonquin Power & Utilities Corp. has a $3.2 billion customer-focused capital plan aimed at enhancing safety, reliability, and customer service. The company's rate base is expected to grow at a 5-6% CAGR through 2028, driven by investments in areas such as the ARIS generation project and transmission projects in SPP.

Valuation and Growth Prospects

Analysts estimate the company's revenue growth at 4.7% for the next year. Currently, the stock trades at a P/E Ratio of -177.63, P/B Ratio of 1.02, and EV/EBITDA of 13.28. The dividend yield stands at 4.33%. The company's growth prospects are supported by its disciplined approach to M&A and organic investment within existing jurisdictions. With a strengthened balance sheet and a credit rating profile that provides low-cost access to capital, Algonquin Power & Utilities Corp. is well-positioned to drive an attractive near-term financial profile.

Risk Management and Future Plans

The company is navigating a complex regulatory landscape, particularly in California regarding wildfire risk at its CalPeco subsidiary. Algonquin Power & Utilities Corp. is working to get its wildfire mitigation plans approved and is engaged with stakeholders to manage risk and reduce costs. The company views its hydro asset as non-core and is open to transactions that would allow it to exit the asset at reasonable terms, although there are no imminent plans to divest.

3. NewsRoom

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CIBC Lowers Algonquin Power & Utilities' Price Target to US$6.25 From US$6.50

Mar -10

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PG&E, Algonquin Power and Avista Are Drawing New Analyst Interest in the Utility Sector

Mar -09

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Algonquin Refocuses On Regulated Utilities As Debt Falls And Taxes Rise

Mar -07

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Why Algonquin Power & Utilities Stock Flopped on Friday

Mar -07

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Algonquin Power & Utilities Corp (AQN) Q4 2025 Earnings Call Highlights: Strong Financial ...

Mar -06

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Is Algonquin Power & Utilities (TSX:AQN) Still Attractive After Its Recent Share Price Recovery

Mar -06

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Algonquin Power & Utilities Q4 Earnings Call Highlights

Mar -06

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Algonquin Power & Utilities (AQN) Tops Q4 Earnings and Revenue Estimates

Mar -06

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.61%)

6. Segments

Regulated Services Group

Expected Growth: 2.5%

The Regulated Services Group's 2.5% growth is driven by increasing demand for utility services, rate base growth through infrastructure investments, and favorable regulatory environments. Additionally, the segment benefits from a stable and predictable revenue stream, supported by long-term contracts and a diversified customer base.

Renewable Energy Group

Expected Growth: 3.5%

Renewable Energy Group's 3.5% growth is driven by increasing demand for clean energy, government incentives, and declining technology costs. Algonquin Power & Utilities Corp.'s diversified portfolio and strategic acquisitions also contribute to growth. Additionally, rising environmental concerns and regulations support the adoption of renewable energy sources, further fueling growth.

7. Detailed Products

Electricity Generation

Algonquin Power & Utilities Corp. generates electricity through its diverse portfolio of renewable energy sources, including wind, solar, hydro, and thermal power.

Electricity Distribution

The company distributes electricity to customers through its regulated utility business, providing safe and reliable electricity to homes and businesses.

Water Distribution

Algonquin Power & Utilities Corp. provides clean drinking water to communities through its water distribution systems.

Wastewater Collection and Treatment

The company collects and treats wastewater through its wastewater collection systems and treatment plants.

Natural Gas Distribution

Algonquin Power & Utilities Corp. distributes natural gas to customers through its regulated utility business.

Renewable Energy Solutions

The company offers renewable energy solutions, including wind, solar, and hydroelectric power, to customers seeking clean and sustainable energy options.

8. Algonquin Power & Utilities Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Algonquin Power & Utilities Corp. operates in a regulated industry, which reduces the threat of substitutes. However, the increasing adoption of renewable energy sources and energy storage technologies could pose a moderate threat to the company's traditional business model.

Bargaining Power Of Customers

Algonquin Power & Utilities Corp. serves a diverse customer base, including residential, commercial, and industrial customers. While large industrial customers may have some bargaining power, the company's diversified customer base reduces the overall bargaining power of customers.

Bargaining Power Of Suppliers

Algonquin Power & Utilities Corp. relies on a diverse range of suppliers for fuel, equipment, and services. While the company has some bargaining power due to its scale, suppliers of specialized equipment and services may have some bargaining power.

Threat Of New Entrants

The utility industry is highly regulated, and new entrants would face significant barriers to entry, including obtaining licenses and permits, building infrastructure, and complying with regulations. This reduces the threat of new entrants.

Intensity Of Rivalry

Algonquin Power & Utilities Corp. operates in a competitive industry, with several established players competing for market share. The company's focus on renewable energy and sustainability may help it differentiate itself, but the industry remains highly competitive.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 62.82%
Debt Cost 6.29%
Equity Weight 37.18%
Equity Cost 6.29%
WACC 6.29%
Leverage 168.98%

11. Quality Control: Algonquin Power & Utilities Corp. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.63$

Current Price

8.63$

Potential

-0.00%

Expected Cash-Flows