odyd

Pattern Energy Group Inc. (PEGI)

171 posts in this topic

3 minutes ago, odyd said:

HASI is having a dividend on record for holders on March 30th, I may put the other half into it.

http://finance.yahoo.com/news/hannon-armstrong-announces-0-30-203000410.html

Or not, they asset class does not interest me as much, besides PEGI pays more, I am just exploring ideas. I still like NEP second best, but their yield is not that good.

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I think I will dip into PEGI.  I'm pretty intrigued.  The link that you gave of th ER said quite a bit.  No IDR.  Private company that drops down to them.  Lots of wind.  And best of all NO drama

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Great to see you analyze the whole yieldco space odyd. I just decided to go big on yieldcos after crash and just went for a broad basket to reduce risk through diversification, weighting only by coarse measures like where in their recent trading range they were, what yield they offered and as usual what margin (leveraged yield) my broker offers. For pick criteria (which i've done extensive FA for CN11 to long ago conclude CN4 as the investable ones) I just looked at some basic muliples like PB and EV/EBITDA. Due to simpler business model with more predictable future cash flows, this coarse analysis by just looking at some key multiples is more adequate than the fast moving business structures of CN11.

So it still remains for me to do the deep dive analysis in these names and I'm happy to see others take a broader dive into the yieldco ponds.

 

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Hi Explo, I did not do a lot of "deep" analysis either, I looked at the asset structure, looked at the stages yieldco was in, tried to understand growth, yield etc. Pretty much the first statement of my analysis was to avoid future drama. This left me with three, NYLD, PEGI and NEP. I did not like that NYLD was sort of considered part of partner delivery, and it was having thermal and conventinal energy. I may still buy it.

I am trying to see if I can do dividend walk meaning if I have a gain in equity plus dividend payment whether is worth it to time moving from dividend to dividend company and collect those or stay. PEGI looked pretty good as deep inside I was always interested in wind holdings. 

I appreciate your effort to put the roster as you have done, it help me to see them all in one place.

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No, probably not going to branch out into yieldco's more broadly at this time.  Dividend stocks in general don't interest me.

8 hours ago, odyd said:

Are you planning to get in?

  I only got into TERP and then GLBL when I saw crazy high yields.  I thought this was due to misplaced fear of SUNE BK--not because people selling knew how messed up things between sune and yieldcos were.  I really though the SUNE BK was going to be resolved when deal did not happen (yet so many seemed to expect it would) or at least when they announced earnings after first delay--haha greater fool me...

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1 hour ago, odyd said:

I appreciate your effort to put the roster as you have done, it help me to see them all in one place.

There are two more on the Toronto exchange (besides mentioned NPI.TO) that I have on observation list but never entered. INE.TO and CSE.TO. CSE.TO had some special risk (legal conflict) I think when I looked it up and I was not willing to do the DD to assess that risk at the time. INE.TO might be a candidate, but I never found that it presented as good opportunity as the rest (same as NPI.TO which looks more attractive to me though). The Toronto listed yieldcos never crashed as much as the US listed..

 

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Thank you July,

a bit fresher press here, Canadain main financial newspaper. Errors on GLBL on not reporting but neat mention for PEGI. I am curious about reconciliation with the partner

http://www.theglobeandmail.com/globe-investor/investment-ideas/market-volatility-leaves-few-yieldcos-still-standing/article29298556/

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Looking at yieldcos of different types, I see that most of the time, the motion of EPS makes a difference to a yield level. In general, yieldco which shows EPS, or profit, will have a lower yield (higher stock price). Companies which under GAAP lose money have higher yield, driven by lower price. I do not think this is a particularly surprising, as value investors here we put a lot of importance on EPS and most people understand profit.

I do not believe this will change for some time. By complete accident, I see that PEGI is one which could potentially turn a profit, hence receive possibly 5 to 6% yield or somewhere in the range of $30.

I am curious if anyone here has similar observations, I wish I knew more on the dynamic of their income statement to make a more informed opinion, but one has to start somewhere.

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Yes I think that's the case too. Profit (= intrinsic equity growth) suggests dividend growth is possible without dilutive equity sales, while losses conversely suggests dividend unsustainabilty without dilutive equity sales. The dilutive equity sales works well to replenish or grow equity per share and dividend if you already are awarded a high PB and low yield by the market. If market awards this to the profitable ones they have double growth outlook benfits. While the high yield ones give back more of its equity quickly to investors. 

I'm still focusing on the high yield ones though.

Take GLBL as best example. Even if their dividend won't sustain beyond 10 years they are priced for it to sustain 3 years and the be completely tapped out.

If PB is clearly less than 1 then they must have really overpaid for assets to not be a bargain.

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