Conrad’s Utility Investor Utility Report Card Security Rating Price Yield 12-Mo. 3-Mo. DVD / Payout Quality Ex-DVD DVD 3-Year DVD Debt/ Capital Industry (Exchange: Ticker) Total Total Share Ratio Grade Date Payment Growth Return Return (CAD) Date AES Corp Buy<28 24.64 2.44 43.81 -0.66 0.15 39.1 B 7/30/2021 8/16/2021 5.3 77.2 Utility, Renewable (NYSE: AES) Energy Shares of leading renewable energy generator and developer are low priced at 14.3 times expected next 12 months earnings with Moody's upgrade to investment grade credit rating nearing. Alto Maipo hydro project in Chile is on track for full operations in December, company has built 100% of tunnels and starts negotiations for permanent financing, remaining financial share of project is $46 mil, has invested $972 mil. Asset encumbered by lower spot prices for output due to faster than expected Chilean renewables build, output limited by drought in country near term but financial risk to parent now appears low. Company plans 72 megawatt of new solar capacity in Michigan for in service by mid-2022. Earnings guidance mid-point remains $1.54 per share in 2021, 7-9% annual profit growth rate target through 2025. Quality Grade B (No Change). AGL Energy Buy<7 4.9 6.33 -50.46 -23.89 0.25 100 C 8/24/2021 10/6/2021 -6.6 36.6 Int'l Electricity (OTC: AGLXY, ASX: AGL) See August 13 Alert "AGL Bottoming, Algonquin a Buy." FY2021 (end June 30) are in line with management guidance, FY2022 net profit after tax on which dividends are set is expected to be 25-30% lower on weak wholesale power market. Spinoff of coal-fired generation progresses as management announces HQ move to Melbourne for both post-split companies as part of cost cutting strategy. Shareholder vote on splitup of company now scheduled for June quarter of 2022, with close to follow shortly. Ramps up battery storage expansion in alliance with technology group Wartsila, plans 1 gigawatt of grid-level capacity in Australia. Management promises more details on split up of company this month. Quality Grade C (No Change). Algonquin Power & Buy<16 15.64 4.36 18.8 1.53 0.17 49.7 A 9/29/2021 10/15/2021 10 43.2 Utility/Renewable Utilities Energy (NYSE: AQN, TSX: AQN) See August 13 Alert "AGL Bottoming, Algonquin a Buy." Company expected to be a bidder for potential sale of American Electric Power's Kentucky utility unit, would have opportunity to raise 4.8% return on equity closer to 9.3% state allowed ROE and to replace coal-fired fleet as did in Missouri following Empire District acquisition. Odds of acquiring American Water Works' New York water utility unit appear to take a hit from state's political upheaval though management says it's still going through the "settlement process." Building microgrid in California to potentially take transmission lines out of service during wildfire season. Company says it's on track to achieve 75% renewable energy generation by 2023. Quality Grade A (no change). Allete Buy<70 67.44 3.74 30.31 -1.93 0.63 80 B 8/13/2021 9/1/2021 4.2 39.4 Regulated (NYSE: ALE) Elec/Gas Upgrading grid in Minnesota and Wisconsin with Oracle data/meter systems to improve efficiencies and cut costs, now as 100% advanced meter deployment in Minnesota. Investment goes into rate base. Small size at $3.5 bil plus market cap and modest earnings multiple (18.9 times expected next 12 months earnings) increase takeover appeal. Mid-point of 2021 earnings per share guidance range is still $3.15. Quality Grade B (No Change). Alliant Energy Corp Hold 61.47 2.62 18.75 6.51 0.4 62.5 A 7/29/2021 8/16/2021 6.3 54.9 Regulated (NYSE: LNT) Elec/Gas Stock now appears fully priced at 25 times expected next 12 months earnings, but operating risk is low with Wisconsin regulators set to approve plan to retire Edgewater coal plant next year, including a 9.8% return on remaining book value of facility through 2045. Mid-point of the 2021 earnings guidance range is $2.57 per share, with company "currently tracking toward the upper half." Quality Grade A (No Change). Conrad’s Utility Investor Utility Report Card Security Rating Price Yield 12-Mo. 3-Mo. DVD / Payout Quality Ex-DVD DVD 3-Year DVD Debt/ Capital Industry (Exchange: Ticker) Total Total Share Ratio Grade Date Payment Growth Return Return (CAD) Date Altagas Ltd Buy<22 20.41 3.89 68.2 1.27 0.08 57.9 B 8/24/2021 9/15/2021 -22.8 53 Gas Utility/Energy (TSX: ALA, OTC: Transport ATGFF) Mix of focused midstream natural gas assets in Canada and regulated natural gas utilities in US continues to perform well. Asset sales needed to cut debt may get a lift from strong natural gas prices in second half of year. Expansion of RIPET propane export facility in western Canada has been slowed by exposure to volatility in commodity spreads and volumes but still moving ahead. Wall Street consensus remains bullish with 14 buys, 1 hold and no sells among analysts tracked by Bloomberg Intelligence. Mid-point of 2021 normalized earnings per share guidance is CAD1.725. Quality Grade B (no change). Altice USA Buy<30 28.27 N/A 6.08 -16.31 2.04 0 B 6/7/2018 6/6/2018 N/A 104.6 Communications (NYSE: ATUS) Company should be able to finance $2.3 bil in higher cost debt due later this year including $1 bil with 6.75% coupon with substantial interest cost savings. Facing tougher competition from fiber broadband networks as AT&T and Verizon report record additions. End game still appears to be acquisition as company operates valuable territory and trades at discounted valuation with enterprise value of 8.5 times trailing 12 months EBITDA. Quality Grade B (no change). Ameren Corp Hold 88.11 2.5 14.62 2.96 0.55 56 A 9/7/2021 9/30/2021 5.2 56 Regulated (NYSE: AEE) Elec/Gas US Court of Appeals reverses a portion of ruling that company must install scrubbers at Jefferson County coal-fired power plant but facility is likely to be retired to cut costs and push utility net zero CO2 target of 85% by 2040. Missouri poses challenge on energy transition cost recovery due to affordability issues. Illinois rates adjusted upward with benchmark interest rates. Mid-point of 2021 earnings guidance range is $3.75 per share. Quality Grade A (No Change). America Movil Buy<18 18.82 2.13 58.74 23.59 0.2 54.2 B 7/15/2021 7/26/2021 5.8 70.1 Intl (NYSE: AMX, MM: Communications AMXL) Odds of successful sale of TracFone unit in US grow with Verizon guarantees on rates. Company says it won't raise its rates for residential or commercial customers in Mexico through end of 2022, wants more "tariff freedom" from regulators. Competition likely lessened by AT&T sale of Vrio Latin American satellite business. Mexican peso value is stable. Claro unit boosts content with Paramount+. Mistral subsea cable connecting Guatemala with southern Chile is now in service, company is partner as well as network beneficiary. Quality Grade B (No Change). American Electric Buy<85 90.41 3.27 18.34 5.97 0.74 63.7 A 8/9/2021 9/10/2021 6.1 62.3 Regulated Power Elec/Gas (NYSE: AEP) Mid-single digit percentage dividend increase appears likely next month. Moody's changes outlook for Ohio unit to negative from stable as regulation in state is a concern but unlikely to affect either earnings growth or cost of capital for geographically diversified utility. Ramps up solar buildout in alliance with privately held Doral LLC. Mid-point of 2021 earnings guidance range is $4.65 per share excluding one-offs, 5-7% target long-term annual growth rate. Quality Grade A (No Change). American States Hold 93.33 1.56 23.29 18.76 0.37 55.8 A 8/13/2021 9/1/2021 9.6 47.8 Regulated Water Water (NYSE: AWR) Conrad’s Utility Investor Utility Report Card Security Rating Price Yield 12-Mo. 3-Mo. DVD / Payout Quality Ex-DVD DVD 3-Year DVD Debt/ Capital Industry (Exchange: Ticker) Total Total Share Ratio Grade Date Payment Growth Return Return (CAD) Date Insiders are heavy sellers following stock's most recent surge, another sign of high valuation as a major headwind with shares selling for nearly 37 times expected next 12 months earnings. California rate deal should help stabilize earnings but drought conditions are a long-term risk. Quality Rating A (no change). American Tower Hold 302.01 1.68 23.26 14.38 1.27 53.6 B 6/17/2021 7/9/2021 19.1 88.5 Communications Corp (NYSE: AMT) Low single digit percentage sequential dividend increase on tap for later this month. Company appears to integrate Telxius assets accretively as acquisition-led growth continues. High valuation is an increasing headwind to shareholder returns with stock trading at 31.7 times trailing 12 months funds from operations and yielding just 1.7%. Quality Grade B (No Change). American Water Hold 185.15 1.3 31.14 18.76 0.6 57 A 8/9/2021 9/1/2021 9.8 63.1 Regulated Water Works (NYSE: AWK) Adds to Illinois water utility presence with purchase of Village of Livingston system, files for $2.1 mil rate increase in Hawaii to pay for infrastructure replacement, closes purchase of Wastewater One LLC system in Indiana following regulators' OK.