Intrinsic value of Algonquin Power&Utilities - AQN

Previous Close

$10.15

  Intrinsic Value

$9.28

stock screener

  Rating & Target

hold

-9%

Previous close

$10.15

 
Intrinsic value

$9.28

 
Up/down potential

-9%

 
Rating

hold

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 0001), $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 4.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  2,486
  3,841
  5,744
  8,334
  11,758
  16,164
  21,697
  28,490
  36,659
  46,304
  57,499
  70,298
  84,732
  100,815
  118,540
  137,891
  158,839
  181,350
  205,388
  230,918
  257,904
  286,320
  316,144
  347,362
  379,969
  413,971
  449,380
  486,221
  524,528
  564,343
Variable operating expenses, $m
  1,885
  2,858
  4,225
  6,085
  8,544
  11,709
  15,684
  20,562
  26,431
  33,358
  41,300
  50,493
  60,861
  72,413
  85,145
  99,044
  114,090
  130,259
  147,526
  165,862
  185,246
  205,657
  227,079
  249,502
  272,923
  297,345
  322,779
  349,241
  376,756
  405,354
Fixed operating expenses, $m
  12
  13
  13
  13
  13
  14
  14
  14
  15
  15
  15
  16
  16
  16
  17
  17
  17
  18
  18
  19
  19
  19
  20
  20
  21
  21
  22
  22
  23
  23
Total operating expenses, $m
  1,897
  2,871
  4,238
  6,098
  8,557
  11,723
  15,698
  20,576
  26,446
  33,373
  41,315
  50,509
  60,877
  72,429
  85,162
  99,061
  114,107
  130,277
  147,544
  165,881
  185,265
  205,676
  227,099
  249,522
  272,944
  297,366
  322,801
  349,263
  376,779
  405,377
Operating income, $m
  589
  970
  1,506
  2,236
  3,200
  4,441
  6,000
  7,913
  10,214
  12,931
  16,184
  19,789
  23,855
  28,386
  33,379
  38,830
  44,731
  51,073
  57,845
  65,037
  72,639
  80,644
  89,046
  97,840
  107,026
  116,604
  126,580
  136,958
  147,750
  158,966
EBITDA, $m
  1,078
  1,672
  2,507
  3,643
  5,144
  7,077
  9,504
  12,483
  16,066
  20,296
  25,207
  30,821
  37,152
  44,207
  51,982
  60,469
  69,658
  79,532
  90,076
  101,274
  113,112
  125,576
  138,658
  152,352
  166,655
  181,569
  197,101
  213,261
  230,064
  247,528
Interest expense (income), $m
  0
  168
  348
  611
  981
  1,484
  2,148
  3,004
  4,078
  5,397
  6,984
  8,856
  11,030
  13,515
  16,318
  19,441
  22,882
  26,640
  30,707
  35,078
  39,746
  44,703
  49,943
  55,460
  61,251
  67,313
  73,644
  80,246
  87,122
  94,275
  101,713
Earnings before tax, $m
  421
  622
  895
  1,255
  1,717
  2,293
  2,996
  3,835
  4,817
  5,947
  7,327
  8,759
  10,340
  12,068
  13,938
  15,948
  18,092
  20,366
  22,767
  25,291
  27,936
  30,701
  33,585
  36,589
  39,713
  42,960
  46,333
  49,837
  53,475
  57,253
Tax expense, $m
  114
  168
  242
  339
  463
  619
  809
  1,035
  1,301
  1,606
  1,978
  2,365
  2,792
  3,258
  3,763
  4,306
  4,885
  5,499
  6,147
  6,829
  7,543
  8,289
  9,068
  9,879
  10,723
  11,599
  12,510
  13,456
  14,438
  15,458
Net income, $m
  308
  454
  653
  916
  1,253
  1,674
  2,187
  2,799
  3,516
  4,342
  5,349
  6,394
  7,548
  8,810
  10,175
  11,642
  13,207
  14,867
  16,620
  18,462
  20,393
  22,412
  24,517
  26,710
  28,991
  31,361
  33,823
  36,381
  39,036
  41,795

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
Total assets, $m
  13,223
  20,429
  30,552
  44,329
  62,541
  85,980
  115,410
  151,541
  194,997
  246,297
  305,844
  373,924
  450,704
  536,249
  630,534
  733,462
  844,887
  964,628
  1,092,492
  1,228,285
  1,371,831
  1,522,980
  1,681,617
  1,847,670
  2,021,114
  2,201,972
  2,390,320
  2,586,284
  2,790,042
  3,001,822
Adjusted assets (=assets-cash), $m
  13,223
  20,429
  30,552
  44,329
  62,541
  85,980
  115,410
  151,541
  194,997
  246,297
  305,844
  373,924
  450,704
  536,249
  630,534
  733,462
  844,887
  964,628
  1,092,492
  1,228,285
  1,371,831
  1,522,980
  1,681,617
  1,847,670
  2,021,114
  2,201,972
  2,390,320
  2,586,284
  2,790,042
  3,001,822
Revenue / Adjusted assets
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
Average production assets, $m
  8,387
  12,958
  19,379
  28,118
  39,671
  54,538
  73,206
  96,124
  123,689
  156,229
  194,001
  237,185
  285,887
  340,149
  399,955
  465,244
  535,922
  611,875
  692,981
  779,116
  870,169
  966,044
  1,066,670
  1,172,000
  1,282,017
  1,396,737
  1,516,209
  1,640,511
  1,769,757
  1,904,092
Working capital, $m
  -181
  -280
  -419
  -608
  -858
  -1,180
  -1,584
  -2,080
  -2,676
  -3,380
  -4,197
  -5,132
  -6,185
  -7,359
  -8,653
  -10,066
  -11,595
  -13,239
  -14,993
  -16,857
  -18,827
  -20,901
  -23,079
  -25,357
  -27,738
  -30,220
  -32,805
  -35,494
  -38,291
  -41,197
Total debt, $m
  6,445
  11,317
  18,160
  27,473
  39,785
  55,630
  75,524
  99,949
  129,325
  164,003
  204,258
  250,280
  302,183
  360,011
  423,748
  493,327
  568,651
  649,596
  736,031
  827,828
  924,865
  1,027,041
  1,134,280
  1,246,532
  1,363,780
  1,486,040
  1,613,363
  1,745,835
  1,883,576
  2,026,739
Total liabilities, $m
  8,939
  13,810
  20,653
  29,966
  42,278
  58,123
  78,017
  102,442
  131,818
  166,496
  206,751
  252,773
  304,676
  362,504
  426,241
  495,820
  571,144
  652,089
  738,524
  830,321
  927,358
  1,029,534
  1,136,773
  1,249,025
  1,366,273
  1,488,533
  1,615,856
  1,748,328
  1,886,069
  2,029,232
Total equity, $m
  4,284
  6,619
  9,899
  14,363
  20,263
  27,858
  37,393
  49,099
  63,179
  79,800
  99,094
  121,151
  146,028
  173,745
  204,293
  237,642
  273,743
  312,540
  353,967
  397,964
  444,473
  493,446
  544,844
  598,645
  654,841
  713,439
  774,464
  837,956
  903,974
  972,590
Total liabilities and equity, $m
  13,223
  20,429
  30,552
  44,329
  62,541
  85,981
  115,410
  151,541
  194,997
  246,296
  305,845
  373,924
  450,704
  536,249
  630,534
  733,462
  844,887
  964,629
  1,092,491
  1,228,285
  1,371,831
  1,522,980
  1,681,617
  1,847,670
  2,021,114
  2,201,972
  2,390,320
  2,586,284
  2,790,043
  3,001,822
Debt-to-equity ratio
  1.500
  1.710
  1.830
  1.910
  1.960
  2.000
  2.020
  2.040
  2.050
  2.060
  2.060
  2.070
  2.070
  2.070
  2.070
  2.080
  2.080
  2.080
  2.080
  2.080
  2.080
  2.080
  2.080
  2.080
  2.080
  2.080
  2.080
  2.080
  2.080
  2.080
Adjusted equity ratio
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  308
  454
  653
  916
  1,253
  1,674
  2,187
  2,799
  3,516
  4,342
  5,349
  6,394
  7,548
  8,810
  10,175
  11,642
  13,207
  14,867
  16,620
  18,462
  20,393
  22,412
  24,517
  26,710
  28,991
  31,361
  33,823
  36,381
  39,036
  41,795
Depreciation, amort., depletion, $m
  489
  702
  1,000
  1,407
  1,944
  2,636
  3,504
  4,570
  5,852
  7,365
  9,023
  11,032
  13,297
  15,821
  18,603
  21,639
  24,927
  28,459
  32,232
  36,238
  40,473
  44,932
  49,613
  54,512
  59,629
  64,965
  70,521
  76,303
  82,314
  88,562
Funds from operations, $m
  797
  1,156
  1,654
  2,323
  3,197
  4,309
  5,691
  7,369
  9,368
  11,707
  14,372
  17,426
  20,845
  24,630
  28,778
  33,281
  38,134
  43,326
  48,851
  54,700
  60,866
  67,344
  74,130
  81,222
  88,619
  96,326
  104,345
  112,684
  121,351
  130,357
Change in working capital, $m
  -68
  -99
  -139
  -189
  -250
  -322
  -404
  -496
  -596
  -704
  -817
  -934
  -1,054
  -1,174
  -1,294
  -1,413
  -1,529
  -1,643
  -1,755
  -1,864
  -1,970
  -2,074
  -2,177
  -2,279
  -2,380
  -2,482
  -2,585
  -2,689
  -2,796
  -2,906
Cash from operations, $m
  865
  1,255
  1,793
  2,512
  3,447
  4,631
  6,095
  7,865
  9,965
  12,411
  15,189
  18,360
  21,899
  25,804
  30,072
  34,694
  39,663
  44,970
  50,606
  56,564
  62,836
  69,419
  76,307
  83,500
  91,000
  98,808
  106,930
  115,373
  124,147
  133,263
Maintenance CAPEX, $m
  -244
  -390
  -603
  -901
  -1,308
  -1,845
  -2,537
  -3,405
  -4,471
  -5,753
  -7,266
  -9,023
  -11,032
  -13,297
  -15,821
  -18,603
  -21,639
  -24,927
  -28,459
  -32,232
  -36,238
  -40,473
  -44,932
  -49,613
  -54,512
  -59,629
  -64,965
  -70,521
  -76,303
  -82,314
New CAPEX, $m
  -3,145
  -4,571
  -6,421
  -8,739
  -11,553
  -14,867
  -18,668
  -22,918
  -27,564
  -32,540
  -37,772
  -43,184
  -48,703
  -54,262
  -59,806
  -65,289
  -70,678
  -75,953
  -81,105
  -86,135
  -91,053
  -95,876
  -100,626
  -105,330
  -110,017
  -114,721
  -119,471
  -124,302
  -129,246
  -134,335
Cash from investing activities, $m
  -3,389
  -4,961
  -7,024
  -9,640
  -12,861
  -16,712
  -21,205
  -26,323
  -32,035
  -38,293
  -45,038
  -52,207
  -59,735
  -67,559
  -75,627
  -83,892
  -92,317
  -100,880
  -109,564
  -118,367
  -127,291
  -136,349
  -145,558
  -154,943
  -164,529
  -174,350
  -184,436
  -194,823
  -205,549
  -216,649
Free cash flow, $m
  -2,524
  -3,706
  -5,231
  -7,128
  -9,413
  -12,081
  -15,110
  -18,458
  -22,070
  -25,882
  -29,849
  -33,847
  -37,835
  -41,755
  -45,555
  -49,198
  -52,655
  -55,910
  -58,959
  -61,803
  -64,455
  -66,930
  -69,251
  -71,442
  -73,529
  -75,542
  -77,506
  -79,451
  -81,402
  -83,386
Issuance/(repayment) of debt, $m
  3,342
  4,871
  6,843
  9,313
  12,312
  15,845
  19,895
  24,424
  29,376
  34,679
  40,254
  46,022
  51,903
  57,828
  63,736
  69,580
  75,323
  80,945
  86,436
  91,796
  97,037
  102,177
  107,239
  112,252
  117,248
  122,260
  127,323
  132,472
  137,740
  143,163
Issuance/(repurchase) of shares, $m
  1,299
  1,880
  2,626
  3,548
  4,648
  5,920
  7,349
  8,907
  10,563
  12,280
  13,945
  15,664
  17,328
  18,907
  20,373
  21,707
  22,895
  23,929
  24,808
  25,535
  26,116
  26,560
  26,881
  27,091
  27,205
  27,237
  27,201
  27,112
  26,981
  26,822
Cash from financing (excl. dividends), $m  
  4,641
  6,751
  9,469
  12,861
  16,960
  21,765
  27,244
  33,331
  39,939
  46,959
  54,199
  61,686
  69,231
  76,735
  84,109
  91,287
  98,218
  104,874
  111,244
  117,331
  123,153
  128,737
  134,120
  139,343
  144,453
  149,497
  154,524
  159,584
  164,721
  169,985
Total cash flow (excl. dividends), $m
  2,116
  3,046
  4,238
  5,733
  7,546
  9,683
  12,134
  14,873
  17,869
  21,076
  24,350
  27,839
  31,397
  34,981
  38,554
  42,089
  45,563
  48,964
  52,285
  55,528
  58,698
  61,807
  64,869
  67,902
  70,924
  73,956
  77,018
  80,133
  83,320
  86,600
Retained Cash Flow (-), $m
  -1,606
  -2,335
  -3,280
  -4,464
  -5,901
  -7,594
  -9,535
  -11,706
  -14,080
  -16,621
  -19,294
  -22,058
  -24,877
  -27,717
  -30,548
  -33,349
  -36,102
  -38,796
  -41,428
  -43,997
  -46,509
  -48,972
  -51,398
  -53,801
  -56,196
  -58,598
  -61,025
  -63,492
  -66,018
  -68,617
Prev. year cash balance distribution, $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 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
  510
  711
  959
  1,269
  1,646
  2,089
  2,598
  3,167
  3,789
  4,455
  5,057
  5,781
  6,520
  7,264
  8,006
  8,740
  9,462
  10,168
  10,858
  11,531
  12,189
  12,835
  13,471
  14,100
  14,728
  15,358
  15,994
  16,640
  17,302
  17,983
Discount rate, %
  8.60
  9.03
  9.48
  9.96
  10.45
  10.98
  11.52
  12.10
  12.71
  13.34
  14.01
  14.71
  15.44
  16.22
  17.03
  17.88
  18.77
  19.71
  20.70
  21.73
  22.82
  23.96
  25.16
  26.42
  27.74
  29.12
  30.58
  32.11
  33.71
  35.40
PV of cash for distribution, $m
  470
  598
  730
  868
  1,001
  1,118
  1,211
  1,270
  1,291
  1,273
  1,195
  1,114
  1,008
  886
  757
  629
  508
  399
  304
  226
  163
  114
  77
  51
  32
  20
  12
  7
  4
  2
Current shareholders' claim on cash, %
  77.1
  60.8
  49.0
  40.2
  33.5
  28.5
  24.5
  21.4
  18.9
  16.9
  15.3
  13.9
  12.8
  11.9
  11.1
  10.4
  9.8
  9.3
  8.9
  8.5
  8.2
  7.9
  7.6
  7.4
  7.2
  7.0
  6.9
  6.7
  6.6
  6.5

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 (AQN)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

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 $1553.6598586 million for the last fiscal year's total revenue generated by Algonquin Power&Utilities. The default revenue input number comes from 0001 income statement of Algonquin Power&Utilities. 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 60% 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 8.6%, whose default value for AQN is calculated based on our internal credit rating of Algonquin Power&Utilities, 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.
    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 78.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $12 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 5.4% for Algonquin Power&Utilities.

Corporate tax rate of 27% is the nominal tax rate for Algonquin Power&Utilities. 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 337.4%.

Life of production assets of 21.5 years is the average useful life of capital assets used in Algonquin Power&Utilities 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 -7.3%. 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 - $2677.94972506 million for Algonquin Power&Utilities - 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 431.766 million for Algonquin Power&Utilities 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 at the current share price and the inputted number of shares is $4.4 billion.

RELATED COMPANIES Price Int.Val. Rating
AQN Algonquin Powe 10.15 9.88  hold
ES Eversource Ene 63.33 39.89  sell
JE Just Energy Gr 3.07 7.82  str.buy
AWK American Water 91.94 39.12  str.sell
XEL Xcel Energy 49.13 18.52  str.sell
PCG PG&E 48.85 11.81  str.sell
EXC Exelon 44.13 34.74  sell
GWRS Global Water R 10.66 1.11  str.sell

COMPANY NEWS

▶ 25 Best Canadian Dividend Stocks for U.S. Investors   [Oct-01-18 04:45PM  Kiplinger]
▶ Top 4 Alternative Energy Stocks as of September 2018   [Sep-06-18 06:57PM  Investopedia]
▶ 5 Utility Stocks Set to Outperform Q2 Earnings Estimates   [Jul-26-18 08:49AM  InvestorPlace]
▶ 4 Utility Stocks to Buy as US-China Trade War Escalates   [Jul-13-18 10:52AM  InvestorPlace]
▶ New Strong Buy Stocks for July 11th   [Jul-11-18 09:47AM  Zacks]
▶ Algonquin Power & Utilities: 1Q Earnings Snapshot   [May-10-18 06:09PM  Associated Press]
▶ Algonquin Power & Utilities posts 4Q profit   [Mar-01-18 07:31PM  Associated Press]
▶ Bear of the Day: El Paso Energy (EE)   [Jan-30-18 07:00AM  Zacks]

CONTACT US       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.