What’s keeping you up at night? Did you just binge-watch a terrifying crime series (guilty)? How about the ongoing Donald Trump announcements? Well, if you’re like most Canadians, it’s more than likely that what’s really keeping you up is one thing: money.
A survey by Sleep Med recently reported that when it comes to losing sleep, finances are usually to blame. What’s more, stress around the economy in general is at an all-time high. Now, about 49% of Canadians were reported to be losing sleep over their finances, with the rising cost of living accounting for 52% of the rising anxiety.
That’s why today we’re going to find ways around this stress. Investing can be one of those tools. Certainly, it takes money to start creating more cash flow. But in the meantime, dividend stocks can provide ongoing income that Canadians can use right away.
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AQN
A historic winner, Algonquin Power & Utilities (TSX: AQN) could be one dividend stock to consider once again. The company is focusing on becoming a pure-play regulated utility. This is exciting for investors looking towards the future, as it means predictable returns and non-regulated segments. Plus, being a pure play regulated utility enhances long-term growth stability.
The company is already seeing some strong wins, with the recent second quarter for 2025 coming in. Now, on the one hand, this is a period of transition; therefore, net earnings came in significantly lower at $17.4 million, down from $180.1 million the year before. This decline mainly came from sales in its stake of Atlantica Sustainable Infrastructure, plus the loss of that dividend income.
However, its Hydro Group, linked to its future investments, saw a strong boost. Earnings surged 176% year-over-year, showing the potential within the renewable energy field after the sale of its other ventures.
Earning income
Not only are you investing for dividend income, these numbers provide a great entry point. Algonquin recently made regulatory filings that include a rate case increase in New England and Arizona. This would total $73.6 million. Should it go through, the increase could enhance the dividend stock’s revenue even more, offsetting those earnings declines and providing a path towards more stability and growth.
Furthermore, it’s becoming an operational machine. These approved rate increases would also help improve its regulated services segment, offsetting the other factors bringing down earnings like higher taxes.
Finally, there’s the dividend. Now in 2023, Algonquin cut its dividend by 40%, bringing it to $0.0650. This unsettled many investors relying on those dividends, bringing the share price down. However, the yield is now at an attractive 4.7% after shares came down, though with an extremely high payout ratio of about 650%. So investors are likely hoping that improved profitability will stabilize that dividend. For now, a $7,000 investment could bring in $325 annually in dividends alone.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| AQN | $7.76 | 902 | $0.36 | $324.72 | Quarterly | $6,997.52 |
Bottom line
Investors considering this stock could certainly be in for a better night’s sleep. The dividend stock has come down in share price, but is now in a place to start focusing on the future. Investors wanting income now should do that, too. Its focus on regulated utilities is a promising long-term strategy, one that could provide safe and reliable earnings. That means safe and reliable dividend income as well.
However, make sure to do your own research. Lower net income and dividend cuts show a struggle while the dividend stock continues its growing pains. Yet overall, this is a strong long-term play for those wanting a stable utility investment, with dividends that can help you hit the pillow each night.
