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Algonquin Power & Utilities Corp. (AQN)
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NextEra Energy Partners LP representing limited partner interests (NEP)
Q: Hi Folks,
I currently hold AQN in my RRSP account at a loss of 30%. I am looking at NEP in the US as a possible replacement. May I have your analysis and opinion of such a move or would you recommend holding onto AQN for now and wait to see if anything comes of the "activist investors".
Thanks
I currently hold AQN in my RRSP account at a loss of 30%. I am looking at NEP in the US as a possible replacement. May I have your analysis and opinion of such a move or would you recommend holding onto AQN for now and wait to see if anything comes of the "activist investors".
Thanks
5i Research Answer:
First, NEP is a US limited partnership, and there are significant adverse tax implications to Canadians, including a tax of 10% on proceeds of a sale, even in registered accounts (not gains, proceeds). The stock has been hit hard this year, and has underperformed AQN. It is also significantly more expensive, nearly 3X on price/earnings. The last quarter was quite weak, with EPS missing estimates by 20%. All things considered, we would not make this switch.