Intrinsic value of Algonquin Power & Utilities Corp. - AQN

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$12.93

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$12.93

 
Intrinsic value

$26.23

 
Up/down potential

+103%

 
Rating

str. buy

 
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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of AQN stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 4.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  6.61
  19.20
  17.78
  16.50
  15.35
  14.32
  13.38
  12.55
  11.79
  11.11
  10.50
  9.95
  9.46
  9.01
  8.61
  8.25
  7.92
  7.63
  7.37
  7.13
  6.92
  6.73
  6.55
  6.40
  6.26
  6.13
  6.02
  5.92
  5.83
  5.74
  5.67
Revenue, $m
  1,059
  1,306
  1,539
  1,793
  2,068
  2,364
  2,680
  3,017
  3,372
  3,747
  4,141
  4,553
  4,983
  5,432
  5,900
  6,386
  6,892
  7,418
  7,965
  8,533
  9,123
  9,737
  10,375
  11,039
  11,730
  12,449
  13,199
  13,980
  14,794
  15,644
  16,530
Variable operating expenses, $m
 
  417
  486
  561
  643
  730
  824
  924
  1,029
  1,140
  1,256
  1,348
  1,475
  1,608
  1,746
  1,890
  2,040
  2,196
  2,358
  2,526
  2,700
  2,882
  3,071
  3,267
  3,472
  3,685
  3,907
  4,138
  4,379
  4,630
  4,893
Fixed operating expenses, $m
 
  541
  555
  569
  583
  597
  612
  628
  643
  659
  676
  693
  710
  728
  746
  765
  784
  803
  823
  844
  865
  887
  909
  932
  955
  979
  1,003
  1,028
  1,054
  1,081
  1,108
Total operating expenses, $m
  870
  958
  1,041
  1,130
  1,226
  1,327
  1,436
  1,552
  1,672
  1,799
  1,932
  2,041
  2,185
  2,336
  2,492
  2,655
  2,824
  2,999
  3,181
  3,370
  3,565
  3,769
  3,980
  4,199
  4,427
  4,664
  4,910
  5,166
  5,433
  5,711
  6,001
Operating income, $m
  226
  348
  498
  663
  842
  1,036
  1,244
  1,465
  1,700
  1,948
  2,208
  2,512
  2,798
  3,096
  3,407
  3,731
  4,068
  4,419
  4,784
  5,163
  5,558
  5,968
  6,395
  6,840
  7,303
  7,785
  8,289
  8,813
  9,361
  9,933
  10,530
EBITDA, $m
  422
  491
  661
  848
  1,052
  1,271
  1,506
  1,757
  2,022
  2,302
  2,597
  2,906
  3,229
  3,566
  3,917
  4,283
  4,664
  5,060
  5,472
  5,900
  6,346
  6,809
  7,292
  7,794
  8,316
  8,861
  9,429
  10,021
  10,639
  11,284
  11,958
Interest expense (income), $m
  132
  197
  252
  313
  380
  453
  531
  615
  704
  798
  897
  1,001
  1,110
  1,224
  1,343
  1,466
  1,595
  1,729
  1,868
  2,012
  2,163
  2,319
  2,481
  2,650
  2,825
  3,008
  3,198
  3,396
  3,603
  3,818
  4,043
Earnings before tax, $m
  130
  151
  246
  349
  462
  583
  712
  850
  996
  1,150
  1,311
  1,511
  1,688
  1,872
  2,065
  2,265
  2,473
  2,690
  2,916
  3,151
  3,395
  3,649
  3,914
  4,190
  4,478
  4,778
  5,090
  5,417
  5,758
  6,115
  6,487
Tax expense, $m
  38
  41
  66
  94
  125
  157
  192
  230
  269
  310
  354
  408
  456
  506
  557
  612
  668
  726
  787
  851
  917
  985
  1,057
  1,131
  1,209
  1,290
  1,374
  1,463
  1,555
  1,651
  1,752
Net income, $m
  131
  110
  180
  255
  337
  426
  520
  621
  727
  839
  957
  1,103
  1,232
  1,367
  1,507
  1,653
  1,806
  1,964
  2,129
  2,300
  2,478
  2,664
  2,857
  3,059
  3,269
  3,488
  3,716
  3,954
  4,203
  4,464
  4,736

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  110
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  8,249
  9,677
  11,398
  13,279
  15,317
  17,510
  19,854
  22,345
  24,980
  27,756
  30,670
  33,723
  36,911
  40,237
  43,701
  47,306
  51,055
  54,951
  59,000
  63,207
  67,580
  72,125
  76,852
  81,770
  86,887
  92,216
  97,767
  103,552
  109,585
  115,878
  122,447
Adjusted assets (=assets-cash), $m
  8,139
  9,677
  11,398
  13,279
  15,317
  17,510
  19,854
  22,345
  24,980
  27,756
  30,670
  33,723
  36,911
  40,237
  43,701
  47,306
  51,055
  54,951
  59,000
  63,207
  67,580
  72,125
  76,852
  81,770
  86,887
  92,216
  97,767
  103,552
  109,585
  115,878
  122,447
Revenue / Adjusted assets
  0.130
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
Average production assets, $m
  474
  564
  665
  774
  893
  1,021
  1,158
  1,303
  1,457
  1,619
  1,789
  1,967
  2,153
  2,347
  2,549
  2,759
  2,978
  3,205
  3,441
  3,686
  3,941
  4,206
  4,482
  4,769
  5,067
  5,378
  5,702
  6,039
  6,391
  6,758
  7,141
Working capital, $m
  -55
  -184
  -217
  -253
  -292
  -333
  -378
  -425
  -475
  -528
  -584
  -642
  -703
  -766
  -832
  -900
  -972
  -1,046
  -1,123
  -1,203
  -1,286
  -1,373
  -1,463
  -1,556
  -1,654
  -1,755
  -1,861
  -1,971
  -2,086
  -2,206
  -2,331
Total debt, $m
  4,290
  5,475
  6,810
  8,269
  9,851
  11,553
  13,372
  15,305
  17,349
  19,503
  21,765
  24,134
  26,608
  29,189
  31,877
  34,675
  37,583
  40,607
  43,749
  47,014
  50,407
  53,934
  57,602
  61,418
  65,390
  69,524
  73,832
  78,321
  83,003
  87,887
  92,984
Total liabilities, $m
  6,326
  7,510
  8,845
  10,304
  11,886
  13,588
  15,407
  17,340
  19,384
  21,538
  23,800
  26,169
  28,643
  31,224
  33,912
  36,710
  39,618
  42,642
  45,784
  49,049
  52,442
  55,969
  59,637
  63,453
  67,425
  71,559
  75,867
  80,356
  85,038
  89,922
  95,019
Total equity, $m
  1,924
  2,168
  2,553
  2,974
  3,431
  3,922
  4,447
  5,005
  5,595
  6,217
  6,870
  7,554
  8,268
  9,013
  9,789
  10,597
  11,436
  12,309
  13,216
  14,158
  15,138
  16,156
  17,215
  18,316
  19,463
  20,656
  21,900
  23,196
  24,547
  25,957
  27,428
Total liabilities and equity, $m
  8,250
  9,678
  11,398
  13,278
  15,317
  17,510
  19,854
  22,345
  24,979
  27,755
  30,670
  33,723
  36,911
  40,237
  43,701
  47,307
  51,054
  54,951
  59,000
  63,207
  67,580
  72,125
  76,852
  81,769
  86,888
  92,215
  97,767
  103,552
  109,585
  115,879
  122,447
Debt-to-equity ratio
  2.230
  2.530
  2.670
  2.780
  2.870
  2.950
  3.010
  3.060
  3.100
  3.140
  3.170
  3.190
  3.220
  3.240
  3.260
  3.270
  3.290
  3.300
  3.310
  3.320
  3.330
  3.340
  3.350
  3.350
  3.360
  3.370
  3.370
  3.380
  3.380
  3.390
  3.390
Adjusted equity ratio
  0.223
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224
  0.224

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  131
  110
  180
  255
  337
  426
  520
  621
  727
  839
  957
  1,103
  1,232
  1,367
  1,507
  1,653
  1,806
  1,964
  2,129
  2,300
  2,478
  2,664
  2,857
  3,059
  3,269
  3,488
  3,716
  3,954
  4,203
  4,464
  4,736
Depreciation, amort., depletion, $m
  196
  144
  164
  186
  209
  235
  262
  291
  322
  354
  388
  393
  431
  469
  510
  552
  596
  641
  688
  737
  788
  841
  896
  954
  1,013
  1,076
  1,140
  1,208
  1,278
  1,352
  1,428
Funds from operations, $m
  291
  254
  343
  441
  547
  660
  782
  912
  1,049
  1,194
  1,346
  1,496
  1,663
  1,836
  2,017
  2,205
  2,401
  2,605
  2,817
  3,037
  3,267
  3,505
  3,754
  4,013
  4,282
  4,563
  4,856
  5,162
  5,482
  5,815
  6,164
Change in working capital, $m
  4
  -30
  -33
  -36
  -39
  -42
  -45
  -47
  -50
  -53
  -55
  -58
  -61
  -63
  -66
  -69
  -71
  -74
  -77
  -80
  -83
  -87
  -90
  -94
  -97
  -101
  -106
  -110
  -115
  -120
  -125
Cash from operations, $m
  287
  395
  376
  477
  585
  702
  827
  959
  1,099
  1,247
  1,401
  1,555
  1,723
  1,899
  2,083
  2,274
  2,472
  2,679
  2,894
  3,117
  3,350
  3,592
  3,844
  4,106
  4,380
  4,665
  4,962
  5,272
  5,596
  5,935
  6,289
Maintenance CAPEX, $m
  0
  -95
  -113
  -133
  -155
  -179
  -204
  -232
  -261
  -291
  -324
  -358
  -393
  -431
  -469
  -510
  -552
  -596
  -641
  -688
  -737
  -788
  -841
  -896
  -954
  -1,013
  -1,076
  -1,140
  -1,208
  -1,278
  -1,352
New CAPEX, $m
  -406
  -91
  -100
  -110
  -119
  -128
  -137
  -145
  -154
  -162
  -170
  -178
  -186
  -194
  -202
  -210
  -219
  -227
  -236
  -245
  -255
  -265
  -276
  -287
  -298
  -311
  -324
  -337
  -352
  -367
  -383
Cash from investing activities, $m
  -2,895
  -186
  -213
  -243
  -274
  -307
  -341
  -377
  -415
  -453
  -494
  -536
  -579
  -625
  -671
  -720
  -771
  -823
  -877
  -933
  -992
  -1,053
  -1,117
  -1,183
  -1,252
  -1,324
  -1,400
  -1,477
  -1,560
  -1,645
  -1,735
Free cash flow, $m
  -2,608
  209
  163
  234
  312
  396
  486
  583
  685
  793
  907
  1,019
  1,144
  1,275
  1,412
  1,554
  1,702
  1,856
  2,017
  2,184
  2,358
  2,538
  2,727
  2,923
  3,127
  3,340
  3,563
  3,795
  4,037
  4,290
  4,554
Issuance/(repayment) of debt, $m
  2,691
  1,195
  1,335
  1,460
  1,582
  1,702
  1,819
  1,933
  2,045
  2,154
  2,262
  2,368
  2,475
  2,581
  2,688
  2,797
  2,909
  3,023
  3,142
  3,265
  3,393
  3,527
  3,668
  3,816
  3,971
  4,135
  4,307
  4,489
  4,681
  4,884
  5,098
Issuance/(repurchase) of shares, $m
  15
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  2,724
  1,195
  1,335
  1,460
  1,582
  1,702
  1,819
  1,933
  2,045
  2,154
  2,262
  2,368
  2,475
  2,581
  2,688
  2,797
  2,909
  3,023
  3,142
  3,265
  3,393
  3,527
  3,668
  3,816
  3,971
  4,135
  4,307
  4,489
  4,681
  4,884
  5,098
Total cash flow (excl. dividends), $m
  115
  1,404
  1,498
  1,693
  1,893
  2,097
  2,305
  2,516
  2,730
  2,947
  3,169
  3,387
  3,619
  3,856
  4,100
  4,351
  4,611
  4,880
  5,159
  5,449
  5,751
  6,066
  6,395
  6,739
  7,099
  7,475
  7,870
  8,284
  8,718
  9,174
  9,652
Retained Cash Flow (-), $m
  11
  -344
  -385
  -421
  -457
  -491
  -525
  -558
  -590
  -622
  -653
  -684
  -714
  -745
  -776
  -807
  -840
  -873
  -907
  -942
  -980
  -1,018
  -1,059
  -1,101
  -1,146
  -1,194
  -1,243
  -1,296
  -1,351
  -1,410
  -1,471
Prev. year cash balance distribution, $m
 
  100
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,160
  1,113
  1,272
  1,437
  1,606
  1,780
  1,958
  2,140
  2,326
  2,516
  2,704
  2,904
  3,111
  3,324
  3,544
  3,771
  4,007
  4,252
  4,506
  4,771
  5,048
  5,336
  5,637
  5,952
  6,282
  6,627
  6,988
  7,367
  7,764
  8,180
Discount rate, %
 
  10.90
  11.45
  12.02
  12.62
  13.25
  13.91
  14.61
  15.34
  16.10
  16.91
  17.75
  18.64
  19.57
  20.55
  21.58
  22.66
  23.79
  24.98
  26.23
  27.54
  28.92
  30.37
  31.89
  33.48
  35.15
  36.91
  38.76
  40.69
  42.73
  44.87
PV of cash for distribution, $m
 
  1,046
  896
  905
  893
  862
  815
  754
  683
  607
  528
  448
  373
  304
  243
  189
  144
  106
  77
  54
  37
  24
  16
  10
  6
  3
  2
  1
  1
  0
  0
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Algonquin Power & Utilities Corp., through its subsidiaries, engages in the generation, distribution, and transmission utility assets in North America. The company generates and sells electrical energy through a portfolio of non-regulated renewable and clean energy power generation facilities. It owns or has interests in hydroelectric facilities with a combined generating capacity of approximately 120 megawatts (MW); wind powered generating facilities with a combined generating capacity of 700 MW; and solar energy facilities with a generating capacity of 30 MW, as well as interests in thermal energy facilities with an installed generating capacity of approximately 335 MW. The company also owns and operates electricity, natural gas, water distribution, and wastewater collection utility systems to approximately 489,000 connections. It serves approximately 93,000 electric connections; 292,000 natural gas connections; and 104,000 regulated water distribution and wastewater collection connections in the states of California, New Hampshire, Georgia, Illinois, Iowa, Massachusetts, Missouri, Arizona, Arkansas, and Texas. The company was founded in 1996 and is headquartered in Oakville, Canada.

FINANCIAL RATIOS  of  Algonquin Power & Utilities Corp. (AQN)

Valuation Ratios
P/E Ratio 27.1
Price to Sales 3.2
Price to Book 1.8
Price to Tangible Book
Price to Cash Flow 12.3
Price to Free Cash Flow -29.8
Growth Rates
Sales Growth Rate 6.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 99%
Cap. Spend. - 3 Yr. Gr. Rate 20.8%
Financial Strength
Quick Ratio 11
Current Ratio 0.3
LT Debt to Equity 222.5%
Total Debt to Equity 223%
Interest Coverage 2
Management Effectiveness
Return On Assets 3.4%
Ret/ On Assets - 3 Yr. Avg. 3.4%
Return On Total Capital 2.7%
Ret/ On T. Cap. - 3 Yr. Avg. 3.2%
Return On Equity 6.8%
Return On Equity - 3 Yr. Avg. 6.6%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 41.8%
EBITDA Margin - 3 Yr. Avg. 34.1%
Operating Margin 20.6%
Oper. Margin - 3 Yr. Avg. 17.3%
Pre-Tax Margin 11.9%
Pre-Tax Margin - 3 Yr. Avg. 10.7%
Net Profit Margin 12%
Net Profit Margin - 3 Yr. Avg. 10.5%
Effective Tax Rate 29.2%
Eff/ Tax Rate - 3 Yr. Avg. 28.2%
Payout Ratio 98.5%

AQN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AQN stock intrinsic value calculation we used $1096 million for the last fiscal year's total revenue generated by Algonquin Power & Utilities Corp.. The default revenue input number comes from 2016 income statement of Algonquin Power & Utilities Corp.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our AQN stock valuation model: a) initial revenue growth rate of 19.2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 10.9%, whose default value for AQN is calculated based on our internal credit rating of Algonquin Power & Utilities Corp., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Algonquin Power & Utilities Corp..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of AQN stock the variable cost ratio is equal to 32.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $528 million in the base year in the intrinsic value calculation for AQN stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.6% for Algonquin Power & Utilities Corp..

Corporate tax rate of 27% is the nominal tax rate for Algonquin Power & Utilities Corp.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the AQN stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for AQN are equal to 43.2%.

Life of production assets of 3.5 years is the average useful life of capital assets used in Algonquin Power & Utilities Corp. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for AQN is equal to -14.1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1924 million for Algonquin Power & Utilities Corp. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 382.191 million for Algonquin Power & Utilities Corp. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Algonquin Power & Utilities Corp. at the current share price and the inputted number of shares is $4.9 billion.


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Stock chart of AQN Financial statements of AQN
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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