Better Buy Today: Algonquin Power Stock or Rogers Stock?

For many TSX-listed companies, 2022 has been an unpleasant awakening. The American bear market has been audible in most stocks. Nevertheless, a few blue-chip stalwarts have suffered much worse losses than many investors would have anticipated a year ago.

The “pain” from this market selloff has not been distributed equally among the equities in this market. Investors should anticipate that the rebound will be concentrated in the stocks that have lost the most ground as we approach 2023. Despite recent growth in the value trade, I contend that a genuine market comeback would see tech leading the way out of the abyss.

Most of the tech industry will no longer experience its peaks. Others won’t survive because their debt loads overwhelm them with each increase in interest rates. Nevertheless, investors shouldn’t anticipate Mr. Market to hold back before exploding higher, perhaps in response to additional “cool” consumer price index reports and dovish remarks from the U.S. Federal Reserve.

Even if some of the blood on the Street is your own, you sometimes have to brave market selloffs and take a bath in it! In this article, we’ll look at two intriguing blue chips that have taken a beating this year but may be able to rebound in 2019.

Algonquin Power & Utilities

Following its greatest collapse to date, Algonquin Power & Utilities (TSX:AQN) is presently trading for just under $10 per share. Following a terrible quarterly earnings performance well above expectations, shares lost close to 35% of their value. Algonquin shares have fallen by about 55% from their highs, a level not seen since the beginning of 2021.

Investors, many of whom had supported the dividend-growth darling for years, took a one-two punch to the gut due to Algonquin’s third-quarter loss and projection reduction. Algonquin did throw investors a little curve ball this year. Currently, there is increasing negative pressure as some analysts question the viability of the enormous dividend, which now yields 9.6%.

Being the victim of a dividend reduction is terrible. In the past, Algonquin had a dividend yield of 5 to 6 percent and promising dividend-growth potential. It now appears as though the compensation will be eliminated. For a company that higher rates and inflation have impacted, it is an excessive commitment.

I don’t think there is enough assurance to keep topping off Algonquin during this downturn. Fast-paced corporate collapse. As a result, it might lose a lot of long-term investors who switch to dividend stocks with higher yields.

Rogers Communications

In the summer, Rogers Communications (TSX:RCI.B) made a mistake by experiencing widespread disruptions. The stock’s decline from its peak to its low was almost 30%. Investors are now prepared to concentrate on post-outage growth as shares are again rising. The summer outages severely impacted income in the most recent quarter. Although revenue increased 3% yearly to about $3.74 billion, net income plunged 24%.

Rogers appears prepared to maintain its position as the economy enters a downturn. The stock has a modest 19.1 times trailing price-to-earnings multiple and a safe 3.5% dividend yield.

Bottom line

Rogers stock is a better option, in my opinion, for investors who don’t want to increase their risk profile going into a recession year, even though Algonquin is a “sexier” option given its historic collapse.