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Innergex Renewable Energy Inc. (INE)
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Innergex Renewable Energy Inc. Cumulative Rate Reset Preferred Shares Series A (INE.PR.A)
Q: I am a 70-year old retiree interested in purchasing INE.PR.A as a long term investment for income. I am more interested in preserving capital than capital gains. Although this security is rated only “4h” by the rating agencies, Innergex would seem to have good business prospects and sufficient cash flow to continue paying dividends on their preferred shares. What do you think?
5i Research Answer:
While INE is fairly small at $2.6B, its cash flow is stable and was close to $400M last year. It is paying $150M in common dividends which could be stopped to protect the preferreds. It has $8.6B in total assets. While there are always interest rate and market and company risks, we would be comfortable with these preferreds and the associated dividends.