Atlantic Power Corp. (ATP.TO) Buy, Sell or Hold

Atlantic Power Corp. (ATP.TO)

3.61

-0.05 (1.37%)

as of May 17, 2021, 6:07:37 pm Market Open.

36 watching

DON'T BUY

Assets are primarily in the US. Recently acquired a Canadian company with Canadian and US assets. Feels the payout ratio is too high.

DON'T BUY

Dividend is sustainable. Debt is high, but not out of hand. His favourite is Altagas, which he prefers.

COMMENT

6.5% debentures. Not really comfortable with their leverage. Their bonds sit at the bottom of the capital structure. Doesn't have any concern that they will be able to meet their interest payments or maturity of their bonds in a timely fashion but there will be a lot of volatility. Trade a little expensive for where they should.

BUY

Produce electricity from natural gas for most of Nova Scotia, New Brunswick and Maine. Margins are quite nice. Earnings just came out the loss of $.40 versus an expected gain of $.19. Yield of 8.3%.

COMMENT

Gas electrical generation. Management had estimated at borrowing at 6% but ended up paying 9.5%. Pay out about 80% of what they earn. It is not too concerned.

COMMENT

Marginal generation of power in North America at this point is gas fired. Has a collection of gas-fired plants in the US and is generally in the lower cost quadrant of generation in its region. Distribution coverage is much better than most power trusts. Has the ability to absorb some taxation but expects a modest distribution cut in 2011.

COMMENT

Have interests in a number of US power companies. Some regulation changes could react negatively on them but he doesn’t think so. Generating a good level of earnings. 15% yield but payout ratio will be getting slightly smaller as the earnings creep ahead. Not sure what’s driving the price down.

PAST TOP PICK

(Past Top Pick Dec 29/06. Down 6%.) Consistent with the interest sensitive sector of the trust market. Took some profit when it was high. Has outperformed many of the power peers. Still likes. A Buy.

BUY ON WEAKNESS

US company. Primarily a collection of power assets. Some of their assets are of shorter duration then he likes.

COMMENT

Is a corporation that is held by at trust. The corporation holds interest in power generating in the Atlantic provinces.Overall, long term it might be an interesting company.

TOP PICK

Has very deep institutional ownership.

BUY

Has material US$ exposure. 78% payout ratio. Good operators in a diverse base of power assets. Still likes.

PAST TOP PICK

The trust has not really gone up, but there is a distribution and it has had an annual yield in the 10% area. Still is holding.

TOP PICK

(A Top Pick Aug 12/05. Down 6%.) A power trust with double-digit yield. Decent asset base and decent payout ratio.70% payout ratio. Good management.

TOP PICK

Have a portfolio of about 15 generation facilities in the US. 10.5% yield. Did a transaction yesterday that is immediately accretive to earnings, cash flow and distributions. In a sector where there is a huge commonality in types of underlying assets, there shouldn't be this degree of pricing discrepency and saw this as an opportunity.

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Atlantic Power Corp. (ATP.TO)