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In This List

Boralex outpaces Canadian power stock performance in Q2

Q2: U.S. Solar and Wind Power by the Numbers

Infrastructure Issues: Tools to Dig Deep on Potential Risks

Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020


Boralex outpaces Canadian power stock performance in Q2

led Canadian powerstock performance in the second quarter, gaining nearly 21% to close at C$19.47 per shareat the end of June, according to an S&P Global Market Intelligence analysis.

Sharesof the independent power producer have largely been on an upward trajectorysince December 2015 — around the time the company announced its intent toacquire approximately350 MW of wind capacity in France.

Thecompany maintained the upward momentum after recording a 45% year-over-yearincrease in its adjusted EBITDAduring the first three months of 2016, having earlier its dividend payout by 7.7%.

Duringthe company's May earnings call,Boralex President and CEO Patrick Lemaire said that the company was increasingits 2017 EBITDA guidance to C$290 million from C$275 million, following thecompletion of two large refinancings to increase Boralex's financialflexibility.

also saw double digitgrowth in its stock price during the second quarter of the year: up 15.38% inthe second quarter to close at C$45.32 per share.

and stocks made upthe remaining two that saw double digit growth in the three months to end June30. TransCanada was up 14.49% to C$58.46 apiece, while TransAlta was up 11.26%to settle at C$6.72 per share.

ATCO'ssubsidiary Canadian UtilitiesLtd. also saw a slight increase in its share value during the threemonths to end June 30, up nearly 3% to close at C$37.43.

,which announced an all-cash transaction to acquire for $2.4billion earlier this year,saw its stock price jump over 9% during the second quarter of the year to closeat C$11.89 per share.

Besidesthe acquisition, Algonquin Power increasedits annual dividend rate by 10% after reporting a year-over-year increase infirst-quarter 2016 adjusted net earnings at C$56.1 million, or 21 cents pershare, versus C$42.6 million, or 17 cents per share, in the opening months of2015.

stockssaw the smallest gain during the second quarter, climbing just over 1.5% toC$7.84 per share.

Bottom-performing stocks

shares lost nearly6% of their value during the second quarter, dropping to C$31.40 per share atclose June 30.

Thecompany came under new leadership in April after David Harris of CEO. Thesame month, the company reported a drop in its first-quarter 2016 revenuesthough normalized EBITDA remainedflat year over year.

and Maxim Power Corp.'sshare losses were limited to about 2% during the second quarter. GuggenheimSecurities started coverageof Brookfield Renewable during the second quarter, which dropped to C$38.46 pershare at the end of June.

Guggenheimhad said at the time that Brookfield Renewable, unlike other yieldcos, did notneed to tap equity markets to finance organic growth. However, just a monthlater, the partnership announced a C$800million equity offering to meet certain debt obligations.

, whichnarrowed its 2016earnings guidance in May, saw a slight drop of 0.31%, to C$3.18 per share atthe end of the second quarter.

Looking ahead

DesjardinsCapital Markets views NorthlandPower Inc. and Boralex stocks favorably.

NorthlandPower recently commenced a strategicreview of the business, hiring CIBC World Markets Inc. and J.P.Morgan Securities LLC to assist in the process.

"Webelieve the review likely involves a sale process, which should attract manysuitors and could result in [Northland Power] being sold at a premium to thecurrent trading range," Desjardins said in increasing its price target onNorthland Power to C$27 per share with a "buy" recommendation.

Desjardinsexpects the midpoint of a potential takeout of Northland Power at C$29 pershare. "NPI has not explicitly said what prompted the review, but apotential bid and/or reflection on the path forward could have played a role;other potential factors that could have led to the strategic review arechallenges/constraints around growth and/or an exploration of a means forfounder Jim Temerty to crystallize the value he has created over the last fewdecades," the brokerage added.

Asfar as Boralex is concerned, Desjardins Capital said that the company'spredominant wind development pipeline in France positions it to capitalize onopportunities which are seemingly lower risk than those in North America.Desjardins Capital revised its Boralex price target to C$22 per share and ismaintaining a "buy" recommendation.