Atlantic Power shares have lost over 70% of their value in the past six months primarily driven by a poorly communicated reduction in monthly dividends. The fall in share price has highlighted the need for the company to sell itself to a larger more efficient operator. Atlantic Power owns a desirable collection of non-coal power plants with Power Purchase Agreements that are best owned by a firm that has a low cost of capital and a low percentage of administrative expenses.
Unfortunately, for shareholders, the current structure is just the opposite: AT has a high cost of capital and a high percentage of administrative expenses. The good news is that there should be many energy firms interested in acquiring Atlantic Power's portfolio. For example, Berkshire Hathaway's MidAmerican Energy Unit recently agreed to spend approximately $10 billion to purchase NV Energy. Our back of the envelope calculation is that a buyer with a high credit rating can pay in excess of $8.00 per share and still achieve excellent investment returns.
Source: Seeking Alpha
Related Articles:
- 7 Dividend Stocks With Room To Increase Their Payout
- 9 High Rated, Lower Debt Dividend Stocks With A Reasonable Payout
- 4 Dividend Stocks To Avoid The Social Security Blues
- Who is Ben Grossbaum and Why Should We Listen to Him?
- 9 High-Yielding Mega-Cap Stocks
Atlantic Power: A 10% Dividend Yield And Potential Sale
Posted by D4L | Monday, July 22, 2013 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
If you're worried about inflation rearing its ugly head next year, you should probably worry about more likely catastrophes, such as bei...
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
When a company pays a dividend, it's a good thing for shareholders. When a company consistently pays a dividend every quarter, it's ...
-
If you've been holding back from investing in your future just because you don't have a lot of extra cash to spare, I've got gre...
-
If you are looking for high-yield dividend stocks that can beat the market, you might want to check out these three companies. They all have...
-
If you are here to build a portfolio that thrives in all seasons, consider dividend stocks. They can generate steady returns and provide sta...
-
My top financial goal is to eventually become financially independent. The foundation of my strategy is to make investments that produce an ...
-
One way to achieve financial freedom is to create passive income, or income that does not depend on your active involvement beyond a certain...
-
The company's remarkable consistency and low-risk business model make it a "first-choice investment opportunity," according to...
-
Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contribut...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.