News

Activist Investor Urges Algonquin Power to Consider Sale of Renewable Energy Business

1 Mins read

Activist investor Starboard Value LP has recently expressed its belief that Algonquin Power & Utilities Corp. (AQN) could enhance shareholder value by executing a well-planned sale of all or a significant portion of its renewable energy business. Starboard, currently holding the largest stake in Algonquin at 7.5%, suggests that shedding its renewables division would not only increase the company’s financial strength but also position it favorably compared to its industry peers.

According to Starboard, Algonquin’s current portfolio makes it significantly greener than other utilities, with one-third of its electric generation capacity derived from renewables and absolutely no coal exposure. This figure surpasses the industry average of 26% for regulated utility peers. By divesting its renewables assets strategically, Algonquin has the potential to achieve an impressive earnings per share target of 75 cents by fiscal 2025. This projection notably exceeds the current FactSet consensus estimate of 63 cents.

In response to this news, Algonquin’s stock experienced a marginal decline of 0.8% during premarket trading. It is worth noting that over the past year, the company’s stock has recorded a decrease of 37.7%. In comparison, the Utilities Select Sector SPDR exchange-traded fund (XLU) has witnessed a more modest decline of 4.9%, while the S&P 500 has achieved a significant 15.7% growth.

Starboard Value LP’s suggestion appears to hold significant growth potential for Algonquin Power & Utilities Corp., offering an opportunity to optimize shareholder value, enhance the company’s financial standing, and align itself with an increasingly sustainable energy landscape.

Related posts
News

Anglo American 2023 Financial Overview

2 Mins read
Revenue Forecast The diversified mining major is expected to post a full-year revenue of $30.83 billion, a decline from the prior-year’s figure…
News

National Australia Bank First-Quarter Profit Decline

1 Mins read
In its recent update, National Australia Bank (NAB) announced a decline in profit for the fiscal first quarter compared to the previous…
News

Mondelez Resilience in Tough Times

2 Mins read
As the dust settles on a challenging earnings season for consumer staples companies, Mondelez strides ahead. Despite inflation-driven price hikes squeezing consumer…

Leave a Reply

Your email address will not be published. Required fields are marked *