Q – I just read that Atlantica Sustainable Infrastructure is being bought out in December with a final dividend possibly coming. Do you have any more details and any advice as whether to sell or wait? And a good replacement for US dividends? – Michael
A – Atlantica Sustainable Infrastructure plc is a London-based company that owns a diversified portfolio of renewable energy, efficient natural gas, electric transmission, and water assets in North and South America, and certain markets in Europe, the Middle East, and Africa. It is being bought by another British company at a price of US$22 a share in a deal expected to close on Dec. 12. The stock, which trades on Nasdaq under the symbol AY, closed on Nov. 22 at US$22.13.
We originally recommended AY in October 2019 at US$24.27. We liked the company’s stability and its reliable dividend, which was US$0.41 per quarter at the time. It’s now US$0.45 ($1.80 per year) to yield 8.1%.
Replacing that cash flow is not easy. Most securities with a yield in that range are much higher risk. An example is Western Union (NYSE: WU). It currently yields 8.7%, but its price has slipped by 38% since we recommended it in late 2021. We rate it a Hold at this stage.
We will look for other options to replace Atlantica. Meantime, tender your shares or sell in the open market. – G.P.