AQN.TO
Algonquin Power & Utilities Corp.
Utilities · Utilities - Diversified · Canada · Stock
Score Breakdown
Scored for Aggressive Growth profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The composite model score of 32.9 is driven primarily by near-failing scores across financial health (6.0), dividend (0.0), and theme (0.0), which together pull the overall score well below average despite some residual growth signal.
- The momentum sub-score of 6.4 reflects that quarterly trends in revenue, earnings, and margins as derived from EDGAR filings show little to no sequential improvement, reinforcing the low overall rank.
- The profitability sub-score of 9.2 confirms that net margin, operating margin, and return on assets are meaningfully below levels the model associates with financially healthy utilities, contributing directly to the monitor-only research label.
Why Not Higher
- The dividend sub-score of 0.0 is an absolute ceiling-lowering factor — the model cannot assign a higher composite score when FCF payout coverage and dividend reliability metrics have completely failed their thresholds, and this single sub-score removes a maximum of 20 points from the possible total.
- The financial health sub-score of 6.0 prevents the score from rising because leverage and interest coverage metrics derived from the filing indicate the company's debt structure is not consistent with investment-grade financial health benchmarks used in the model, which is a particularly serious concern for a capital-intensive utility.
Data Confidence
10 / 10
Very High — full data coverage
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Algonquin Power & Utilities Corp. (AQN.TO) is a Canadian diversified utility and renewable energy company that owns and operates regulated electric, natural gas, water, and wastewater distribution systems primarily across North America, alongside a portfolio of renewable generation assets including wind, solar, and hydroelectric facilities. The company operates through two main segments: a regulated services group and a renewable energy group, giving it exposure to both stable rate-base utility revenues and the more capital-intensive renewables development pipeline. Despite this dual positioning, the model has assigned AQN.TO a score of 32.9/100, reflecting material weaknesses across nearly every scoring dimension derived from its FY2025 10-K filing. The growth sub-score of 15.0 and profitability sub-score of 9.2 signal that revenue, net income, and margin performance have been under significant pressure, while the financial health sub-score of 6.0 — the lowest category outside of dividend and theme — points to elevated leverage and strained interest coverage that are characteristic of a heavily indebted capital structure. The dividend sub-score of 0.0 is a particularly stark data point, indicating the dividend profile as measured by FCF payout sustainability, DPS streak integrity, and FCF coverage has broken down entirely in the filing period. The research tradeoff here is between a business with genuine long-term renewable energy infrastructure assets and a balance sheet and income statement that, per the EDGAR filing data, currently show very limited financial resilience, making this a monitor-only research candidate rather than one with an actionable near-term research thesis.
Plain English
Algonquin Power & Utilities is a Canadian company that supplies electricity, natural gas, and water to households and businesses, and also builds renewable energy like wind and solar farms. The model score of 32.9 out of 100 is quite low, meaning the financial data from its regulatory filings — things like revenue growth, profit margins, debt levels, and dividend health — are mostly weak right now. The Very High risk rating reflects that the company is carrying a lot of debt relative to its earnings and that its dividend reliability has deteriorated significantly according to the filing data. For a researcher, this is a situation to watch closely rather than one with a clearly supportive financial profile.
Bull Case vs. Bear Case
Bull Case
- The growth sub-score of 15.0, while modest in absolute terms, is the highest sub-score in the model and suggests there is at least some measurable revenue or earnings trajectory that could improve if the company successfully executes asset disposals and refocuses its portfolio.
- Algonquin's regulated utility segment provides rate-base revenues that are structurally tied to approved returns, which could support a gradual recovery in profitability metrics if the company reduces its debt load and operating cost pressure eases.
- The aggressive growth goal profile achieves its best-fit score of 47.9 within this model, indicating that if financial health and profitability metrics were to recover, the underlying business structure could align more favorably with growth-oriented research frameworks.
Bear Case
- The financial health sub-score of 6.0 out of 20 indicates severe leverage and weak interest coverage as derived from the FY2025 10-K, which in a high-interest-rate environment creates meaningful pressure on the company's ability to service debt and invest in its asset base.
- The profitability sub-score of 9.2 out of 20 reflects compressed net and operating margins alongside a weak return on assets, suggesting the company's capital-intensive operations are not currently generating returns commensurate with the size of its balance sheet.
- The dividend sub-score of 0.0 out of 20 is the most alarming signal in the dataset, indicating that free cash flow coverage of the dividend, dividend per share streak, and DPS growth metrics have all failed the model's thresholds simultaneously — a strong indication of fundamental income-statement stress.
What Could Change the Picture
Bullish Triggers
- A meaningful improvement in the financial health sub-score — driven by demonstrated debt reduction, improved interest coverage ratios, or successful asset monetization reflected in a subsequent 10-K filing — would be the single most important data change to shift the research view more favorably.
- Recovery of the dividend sub-score above zero, specifically through evidence of free cash flow covering dividend obligations and restoration of a consistent DPS track record in future EDGAR filings, would signal that the income statement has stabilized sufficiently to support the company's capital return commitments.
Bearish Triggers
- Any further deterioration in the profitability sub-score below the current 9.2, particularly if operating margins continue to compress in future quarterly or annual filings, would suggest the core utility operations are losing efficiency and further erode confidence in a recovery thesis.
- Evidence of additional leverage increases or a worsening interest coverage ratio in subsequent 10-K or interim filings would reinforce the bear case and potentially lower the financial health sub-score further from its already critically low level of 6.0.
Red Flags
- The dividend sub-score of 0.0 indicates that free cash flow coverage of dividend obligations has broken down entirely per the FY2025 filing, which is a material signal of capital allocation strain.
- A financial health sub-score of 6.0 reflects leverage and interest coverage metrics that are deeply below average, consistent with a balance sheet that leaves little room for financial flexibility or unexpected operational headwinds.
- The theme sub-score of 0.0 suggests the model found no qualifying macro theme exposures in the filing data, meaning the company does not currently benefit from thematic tailwinds such as energy transition or infrastructure spending as scored under the model framework.
Risk Profile
Very High RiskThe Very High risk rating reflects a combination of extreme balance sheet leverage, a completely failed dividend coverage profile as scored from the FY2025 EDGAR filing, and near-zero momentum in earnings and margin recovery — all of which create compounding downside risks that are particularly acute for a capital-intensive regulated utility that depends on stable cash flows. For this specific company, the risk is not simply sector-level utility risk but issuer-specific financial fragility as evidenced by the sub-score distribution across all six model dimensions.
Key Catalysts to Watch
The most critical catalysts to monitor for AQN.TO are any regulatory filing disclosures related to debt restructuring, asset divestiture completion, or changes in regulated rate-base returns that could materially shift the financial health and profitability sub-scores in a future model run. Researchers should also watch for any updated 10-K or interim filings that show free cash flow generation recovering to levels sufficient to rebuild dividend coverage metrics, which would be the clearest quantitative signal of fundamental stabilization.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.