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TC Energy Corporation (TRP)
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Fortis Inc. (FTS)
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Algonquin Power & Utilities Corp. (AQN)
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BMO Equal Weight Utilities Index ETF (ZUT)
Q: Retired dividend-income investor. We hold AQN in my wife's RRSP...held it since 2011...bought it at $5.60 and trimmed it several times over the years.
I am debating whether to flush it and take the proceeds and buy ZUT. I also own FTS, TRP and other utility-energy equities contained within ZLB and CDZ.
For the "keep AQN" argument = a) good momentum YTD = +27%, b) great chart, especially with the 50 mda overlay, c) if there is a take-over of AQN, there is a probable premium of "who knows "% (30%?).
For the "flush AQN" argument = a) with other planned cash injections throughout 2023, this would improve my overall sector allocations, b) minor point, but it would simplify my portfolio, by the elimination of a holding (I hold a reasonably concentrated portfolio of 12 blue chip stocks and 10 ETF's, plus fixed income), c) I thought I read that AQN is not expected to have a high rate of growth this year, d) the holdings inside ZUT look appealing, containing both renewable and non-renewable.
I am ok letting it ride for a while longer, but also ok flushing it. Your thoughts? Am I missing anything? I know you can't compare a single stock to a diversified ETF.
Thanks for your help...much appreciated...Steve
I am debating whether to flush it and take the proceeds and buy ZUT. I also own FTS, TRP and other utility-energy equities contained within ZLB and CDZ.
For the "keep AQN" argument = a) good momentum YTD = +27%, b) great chart, especially with the 50 mda overlay, c) if there is a take-over of AQN, there is a probable premium of "who knows "% (30%?).
For the "flush AQN" argument = a) with other planned cash injections throughout 2023, this would improve my overall sector allocations, b) minor point, but it would simplify my portfolio, by the elimination of a holding (I hold a reasonably concentrated portfolio of 12 blue chip stocks and 10 ETF's, plus fixed income), c) I thought I read that AQN is not expected to have a high rate of growth this year, d) the holdings inside ZUT look appealing, containing both renewable and non-renewable.
I am ok letting it ride for a while longer, but also ok flushing it. Your thoughts? Am I missing anything? I know you can't compare a single stock to a diversified ETF.
Thanks for your help...much appreciated...Steve
5i Research Answer:
AQN is expected to show good growth this year, but it is more of a 'recovery' year. On a eight or nine year basis, there has indeed been very little growth, and 2024 is not expected to show a lot either (based on consensus). We don't think anything was missed here: you had us at 'improve overall sector allocations' so the flush/clean up argument wins here for us.