AQN - Stock Market Sell-Off: Is Algonquin Power & Utilities a Buy?
If you check out most online quote services, Algonquin Power & Utilities ' (NYSE: AQN) dividend yield will be listed at over 9%. Don't count on that continuing though. Management has already announced that the dividend will be cut by 40% in 2023. Given the recent stock price, the going forward yield is more like 5.5%.
Still, that's pretty generous. But even after a 40% stock price decline over the past year, the risks probably outweigh the rewards when it comes to owning Algonquin Power & Utilities' stock. Here's why.
The boards of directors of most companies generally don't like to announce dividend cuts. For starters, investors frown on them, often leading to poor stock price performance, and such changes, rightly or wrongly, are seen as a commentary on a company's business prospects. So it is highly likely that Algonquin Power & Utilities didn't make the decision to cut the dividend by 40% lightly.
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Stock Market Sell-Off: Is Algonquin Power & Utilities a Buy?