Read This Before Buying Algonquin Power & Utilities Corp (TSE:AQN) For Its Dividend

Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. Over the past 10 years, Algonquin Power & Utilities Corp (TSE:AQN) has returned an average of 6.00% per year to shareholders in terms of dividend yield. Does Algonquin Power & Utilities tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. See our latest analysis for Algonquin Power & Utilities

5 checks you should use to assess a dividend stock

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

• Is it the top 25% annual dividend yield payer?

• Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

• Has the amount of dividend per share grown over the past?

• Can it afford to pay the current rate of dividends from its earnings?

• Will it have the ability to keep paying its dividends going forward?

TSX:AQN Historical Dividend Yield August 9th 18

Compared to its peers, Algonquin Power & Utilities generates a yield of 4.99%, which is high for Integrated Utilities stocks.

Next Steps:

Before investing in Algonquin Power & Utilities for the dividend it’s worth taking a look at earnings per share, and balance sheet strength. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Here are three more fundamental factors you could consider:

1. Future Outlook: What are well-informed industry analysts predicting for AQN’s future growth? Take a look at our free research report of analyst consensus for AQN’s outlook.

2. Valuation: What is AQN worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether AQN is currently mispriced by the market.

3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements. The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.