Algonquin Power & Utilities Corp. Declares First Quarter 2024 Common Share Dividend of U.S.$0.1085 (C$0.1468), and Declares First Quarter 2024 Preferred Share Dividends

Rhea-AI Summary

Algonquin Power & Utilities Corp. (AQN) announces dividend payouts for common and preferred shares, with US$0.1085 per common share and varying amounts for preferred shares. Dividends to be paid in cash, with options for Canadian dollar payouts. The company suspended its DRIP for common shares in 2023. Shareholders can choose to receive dividends in either US dollars or Canadian dollars. Dividends declared qualify as eligible dividends under Canadian tax laws.

Insights

Financial Analyst

The announcement by Algonquin Power & Utilities Corp. regarding the approval and declaration of dividends for its common and preferred shares is a reflection of the company's current financial health and its commitment to shareholder returns. The specified dividend amounts for each share class, along with the decision to suspend the dividend reinvestment plan (DRIP), are critical elements for current and prospective investors to consider. The suspension of the DRIP could suggest that the company prefers to retain cash or that it believes the stock is undervalued and thus not the best use of capital at this time.

For investors, the dividend yield, which can be calculated from the declared dividend amounts, is an important metric for assessing the income-generating potential of the stock relative to its market price. The yield must be weighed against the company's ability to sustain these payments, which is typically assessed by examining earnings, free cash flow and payout ratios. A consistent or increasing dividend payout can be a positive signal, indicating stable or improving financial performance, while a suspended DRIP might raise questions about future growth or capital allocation strategies.

Market Research Analyst

The choice to offer dividends in both US and Canadian dollars provides flexibility for international investors and could affect the stock's attractiveness, particularly in light of currency exchange rates. The Bank of Canada's daily average exchange rate on the day before the declaration date determines the Canadian dollar equivalent of the dividend, which introduces a variable exchange rate risk for investors who opt to receive dividends in Canadian dollars.

Furthermore, the classification of dividends as 'eligible dividends' for tax purposes is an important consideration for shareholders. Eligible dividends are taxed at a lower rate than ordinary income in Canada, which could influence the after-tax return for Canadian investors. This tax efficiency can be a compelling factor for income-focused investors, especially those in higher tax brackets.

Economist

The suspension of the DRIP program may have broader economic implications, potentially signaling a strategic shift in the company's capital management. By suspending the DRIP, the company is effectively reducing the automatic reinvestment of dividends into additional shares, which can impact the company's equity base and capital structure. This move might indicate a preference for a more conservative financial strategy, possibly in anticipation of less favorable economic conditions or upcoming investments that require liquidity.

Additionally, the impact of exchange rates on dividends is noteworthy, as it reflects the interconnected nature of global financial markets. Fluctuations in the exchange rate can affect the real value of dividends for international investors, adding an extra layer of complexity to investment decisions in multinational utilities like Algonquin Power & Utilities Corp.

OAKVILLE, ON, March 8, 2024 /PRNewswire/ - Algonquin Power & Utilities Corp. ("AQN") (TSX: AQN) (TSX: AQN.PR.A) (TSX: AQN.PR.D) (NYSE: AQN) announced today that its board of directors has approved and declared the following common and preferred share dividends:

1. US$0.1085 per common share, payable on April 15, 2024, to the shareholders of record on March 28, 2024, for the period from January 1, 2024 to March 31, 2024. Registered shareholders can elect to receive the dividend in Canadian dollars in the amount of C$0.1468. 
   
   
2. C$0.41100 per preferred share, Series A, payable in cash on April 1, 2024 to preferred share, Series A holders of record on March 15, 2024, for the period from December 31, 2023 to, but excluding, March 31, 2024. 
   
   
3. C$0.31819 per preferred share, Series D, payable in cash on April 1, 2024 to preferred share, Series D holders of record on March 15, 2024, for the period from December 31, 2023 to, but excluding, March 31, 2024.

Each of the foregoing dividends will be paid in cash. Effective March 16, 2023, AQN suspended the dividend reinvestment plan ("DRIP") for its common shares. If AQN elects to reinstate the DRIP in the future, shareholders who were enrolled in the DRIP at its suspension and remain enrolled at reinstatement will automatically resume participation in the DRIP.

The quarterly dividends payable on common shares are declared in U.S. dollars. Beneficial shareholders (those who hold common shares through a financial intermediary) who are resident in Canada or the United States may request to receive their dividends in either U.S. dollars or the Canadian dollar equivalent by contacting the financial intermediary with whom the common shares are held. Unless the Canadian dollar equivalent is requested, holders of common shares will receive dividends in U.S. dollars, which, as is often the case, the financial intermediary may convert to Canadian dollars. Registered holders of common shares receive dividend payments in the currency of residency. Registered holders of common shares may opt to change the payment currency by contacting TSX Trust Company at 1-800-387-0825 prior to the record date of the dividend.

The Canadian dollar equivalent of the quarterly common share dividend is based on the Bank of Canada daily average exchange rate on the day before the declaration date.

Pursuant to the Income Tax Act (Canada) and corresponding provincial legislation, AQN hereby notifies holders of common shares, preferred shares, Series A, and preferred shares, Series D that such dividends declared qualify as eligible dividends.

About Algonquin Power & Utilities Corp. and Liberty

Algonquin Power & Utilities Corp., parent company of Liberty, is a diversified international generation, transmission, and distribution utility with approximately $18 billion of total assets. AQN is committed to providing safe, secure, reliable, cost-effective, and sustainable energy and water solutions through its portfolio of electric generation, transmission, and distribution utility investments to over one million customer connections, largely in the United States and Canada. In addition, AQN owns, operates, and/or has net interests in over 4 GW of installed renewable energy capacity. AQN's common shares, preferred shares, Series A, and preferred shares, Series D are listed on the Toronto Stock Exchange under the symbols AQN, AQN.PR.A, and AQN.PR.D, respectively. AQN's common shares, Series 2018-A subordinated notes, Series 2019-A subordinated notes and equity units are listed on the New York Stock Exchange under the symbols AQN, AQNB, and AQNU, respectively.

Visit AQN at www.algonquinpower.com and follow us on Twitter @AQN_Utilities.

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SOURCE Algonquin Power & Utilities Corp.

FAQ

What is the dividend amount per common share declared by AQN?

AQN declared a dividend of US$0.1085 per common share.

When will the dividend for common shares be payable?

The dividend for common shares will be payable on April 15, 2024.

What is the dividend amount per preferred share, Series A, declared by AQN?

AQN declared a dividend of C$0.41100 per preferred share, Series A.

When will the dividend for preferred share, Series A, be payable?

The dividend for preferred share, Series A, will be payable on April 1, 2024.

What is the dividend amount per preferred share, Series D, declared by AQN?

AQN declared a dividend of C$0.31819 per preferred share, Series D.

When will the dividend for preferred share, Series D, be payable?

The dividend for preferred share, Series D, will be payable on April 1, 2024.

What currency are the dividends payable in?

All dividends will be paid in cash.

When did AQN suspend its dividend reinvestment plan for common shares?

AQN suspended the dividend reinvestment plan for common shares on March 16, 2023.

How can beneficial shareholders request their dividend currency?

Beneficial shareholders can request to receive dividends in either US dollars or Canadian dollars through their financial intermediary.

What is the basis for determining the Canadian dollar equivalent of the quarterly common share dividend?

The Canadian dollar equivalent is based on the Bank of Canada daily average exchange rate on the day before the declaration date.

Do the dividends declared by AQN qualify as eligible dividends?

Yes, the dividends declared by AQN qualify as eligible dividends under Canadian tax laws.