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Market Chatter: Algonquin's Dividend Primed For a Boost After Acquisitions

Algonquin Power & Utilities Corp. (AQN.TO) has been a busy bee on the acquisition front, the Globe & Mail reports.

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% to 31 cents annually. After a recent run up in the share price, the stock's dividend yield is now 4.4%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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