Thoughts on AQN with pending interest rate increases?

Hello! Looking for your thoughts on AQN as a possible buy at this time or early in the new year? The Utilities sector has seen a decline in recent months. With pending interest rate increases by the Bank of Canada today and another towards the end of the year, is this a good or bad time to buy AQN? Looking to hold this for the long term. Thanks!

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Asked on October 25, 2022 10:49 am

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Hey there,

If you are looking at a long-term hold - have zero issues with AQN at these levels. That said, the current environment is still a challenging one for utilities. As you pointed out, higher rates is a headwind for utilities which tend to have higher debt loads. Of note, AQN does have one of the higher debt loads in relation to regulated utilities but as a part renewable this is to be expected.

At the end of the day, I expect utilities to remain under pressure until rate hikes stabilize.

Mat

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Posted by Mathieu Litalien

Answered on October 26, 2022 4:50 am

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