Algonquin Power & Utilities Corp. (AQN) Fundamental Analysis: Bull vs. Bear Case

AQN

Algonquin Power & Utilities Corp.

Fundamental data last updated:June 12, 2026

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company profile

SECTOR

Utilities

industry

Renewable Utilities

Exchange

NYSE

County of HQ

CA

Next Earnings Date

08/07/2026

Business Summary

Algonquin Power & Utilities Corp., through its subsidiaries, owns and operates a portfolio of regulated and non-regulated generation, distribution, and transmission utility assets. The company operates through two segments, Regulated Services Group and Renewable Energy Group. The Regulated Services Group segment operates a portfolio of rate-regulated utilities located in the United States, Canada, Chile, and Bermuda. Its utilities provide distribution services to approximately 1,093,000 customer connections in the electric, natural gas, and water and wastewater sectors The Renewable Energy Group segment generates and sells electrical energy, capacity, ancillary products, and renewable attributes produced by its portfolio of renewable and clean power generation facilities primarily in the United States and Canada. It owns and operates hydroelectric, wind, solar, and thermal facilities; and owns and operates a portfolio of clean energy and water infrastructure assets. The company was incorporated in 1988 and is headquartered in Oakville, Canada.

VALUATION

P/E

26.96 Market Cap ($M USD)

$4.56B

Forward P/E

12.10 PEG

0.10 PRICE TO SALES

1.81 PRICE TO BOOK

0.98 EV / EBITDA

12.06 5-Year Average P/E

Free Cash Flow Yield

-2.41%

DCF Value

$-16.82

Graham Number

$5.48

Price to FCF

-41.43

EV to FCF

-101.56

Earnings Yield

3.70%

FCF Yield

-2.41%

DIVIDEND

Yield

4.39%

Annual Payout

$0.26

Payout Ratio

125.53%

Consecutive Years of Dividend Growth

5-Year Dividend Growth Rate

Financial Health & Profitability

Earnings Per Share

$0.22

Next Year EPS Growth Estimate

$0.49

Next Year Revenue Growth Estimate

$305.66B

Return on Equity (ROE)

3.63%

FREE CASH FLOW

Operating Margin

19.73%

Debt-to-Equity

1.41 Piotroski F-Score

5 Altman Z-Score

0.32 Return on Invested Capital (ROIC)

3.84%

Current Ratio

1.05 Quick Ratio

0.87 Net Debt to EBITDA

7.14 Interest Coverage

1.75 Gross Profit margin

36.71%

FCF PER SHARE

$-0.14

REVENUE PER SHARE

$3.28

Gainseekers Quantitative Analysis

Summary

The market seems to be mispricing AQN, with its snapshot price trading significantly below its DCF value. The Forward P/E of 12.91 suggests potential growth, yet the Altman Z-score of 0.33 raises red flags about financial distress. Despite an earnings yield of 3.61%, which indicates some profitability, the company’s safety and growth prospects are questionable. The Graham Number also suggests undervaluation, but the high payout ratio and low ROE indicate potential inefficiencies in capital allocation.

AI Exposure / Tech Reliance

As a player in the renewable utilities sector, AQN is well-positioned to leverage AI and modern tech for operational efficiencies and smart grid advancements. The industry's shift towards sustainable energy solutions aligns with technological integration, offering resilience against traditional energy market disruptions. However, the company's ability to capitalize on these shifts will depend on strategic investments and innovation.

The Bull Case

For value or GARP investors, AQN presents an intriguing opportunity. The ROIC of 3.84% and a Piotroski F-Score of 5 indicate moderate operational efficiency and financial health. Despite a negative FCF yield, the company's operating margin of 19.73% suggests strong pricing power. These metrics hint at a potential for capital efficiency and long-term growth, making it a candidate for those seeking undervalued assets with room for improvement.

The Bear Case

On the flip side, AQN's structural weaknesses are glaring. The negative FCF yield and a Price to FCF ratio of -42.49 highlight severe cash flow issues. Coupled with a high net debt to EBITDA ratio of 7.14, the company faces significant leverage risks. Additionally, trading near its 52-week high with a Price/Book ratio of 1.01 suggests limited upside potential, making it vulnerable to market corrections.

Market Sentiment & Smart Money

Short Interest %

Analyst Consensus

Hold

Average Analyst Price Target

$6.75

Institutional Ownership %

1-Year Beta

0.88 Insider Buying % (6 Mo)

Distance to 52-Week High

19.90%

Distance to 52-Week Low

10.29%

EARNINGS SURPRISE %

18.18%

50-DAY SMA

$6.18

200-DAY SMA

$6.10

⚠️ Financial Disclaimer:
This content is for informational purposes only and is not financial advice. Information may be delayed or inaccurate. We may earn a commission from partner links.