Algonquin Power & Utilities Corp. has been a busy bee on the acquisition front.
In the past month, the company's renewable power generation arm closed three different acquisitions, shelling out $387-million (U.S.) to expand its presence in the U.S. The latest deals add majority interests or full stakes in wind projects in Texas and Illinois.
Because the deals are expected to be accretive in the long run, and because they come with long-term sales contracts, there is speculation now that Algonquin will boost its dividend again. And even if they aren't thinking about it, there's prodding for management to pay more out.
Analyst Ian Tharp at CIBC World Markets Inc. notes the string of new purchases "gives management sufficient ammunition for another dividend increase heading into [the fourth quarter] reporting season."
Algonquin last raised its dividend in August, boosting the payout by 11 per cent to 31 cents annually. After a recent run up in the share price, the stock's dividend yield is now 4.4 per cent.
The latest acquisition to close is the $149-million purchase of the Shady Oaks wind farm in Illinois, which comes with a 20-year purchase power agreement with Illinois' largest electric utility.
Before that, Algonquin picked up 60 per cent interests in the 200 megawatt Minonk wind project and the 150 megawatt Senate wind project in Texas. Both projects achieved commercial production in December.
To fund these acquisitions Algonquin financed a few times in the past few months, including a private bond offering, a subscription receipt deal with Emera and a preferred share offering.
(Tim Kiladze is the Globe and Mail's Capital Markets Reporter.)