We won’t have to wait long to hear Algonquin Power & Utilities’ (TSX: AQN, NYSE: AQN) plan for its dividend this year. The company’s Investor Call on January 12 will likely include revised guidance along with plans to corral debt and the Kentucky Power acquisition from American Electric Power (NYSE: AEP)—now blocked by the Federal Energy Regulatory Commission. Shares are pricing in a dividend cut of at least one-third. What management decides will likely depend on how fast it wants to reduce roughly $3.4 billion in variable rate debt, and whether it walks away from Kentucky Power.
This year is shaping up as a banner one for dividend increases in the Utility Report Card coverage universe. So far, 103 of the 179 companies tracked have raised their payouts at least once. And I count roughly three-dozen more that will almost certainly deliver a boost between now and December 31.
Since the start of 2022, the US Dollar Index is up about 15 percent to its highest level since 2001. That’s the result of determined inflation-fighting by the US Federal Reserve in the context of a still relatively strong US economy.
Uncertainty is the order of the day for the economy and investment markets. But ironically, with Q1 results and guidance updates all in, 12 to 18 month dividend risk continues to drop for the essential services companies tracked in the Utility Report Card.
If all management teams live within their means, there would be no need for an Endangered Dividends List. But reality is businesses take risks in good times that come back to burn them in bad ones. And the five companies on the EDL reporting Q1 results so far still have some very real vulnerability.
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Roger's current take and vital statistics on more than 200 essential-services stocks.