Versant’s Fiore Remains Neutral on Boralex

Versant analyst Massimo Fiore says that while the Quebec power producer is well run, there are no near terms catalysts that might inject some energy into the company's stock. “][/caption]On Wednesday, Boralex (TSX:BLX) reported its Q1, 2012 numbers. Revenue was relatively flat, $57.5-million compared to last year’s $57.3-million, but earnings were a little better, up to $33.3-million from $31.2-million in Q1, 2011.

Versant Partners analyst Massimo Fiore says that while the results were solid, he believes the stock is fairly priced “considering no short-term growth, the lack of a dividend and no near-term catalysts.” In a research update to clients today, Fiore maintained his “Neutral” rating on Boralex and twelve-month target of $8.20.

Boralex, which is headquartered in a small Quebec town called Kingsey Falls, was founded in 1982. The company, which was once a subsidiary of packaging and tissue products giant Cascades, built one of the first power stations in Québec to supply electricity to the Hydro-Québec grid. Today, the company owns and operates cogeneration and hydroelectric power plants, biomass facilities (which it is currently exiting), and wind farms, mainly throughout the Northeast U.S. and Quebec. Boralex now manages an electric power generation portfolio of close to 500 megawatts of installed capacity.

Fiore says Boralex is clearly passing on the short term appeal a dividend would provide shareholders in favour of redeploying capital for growth, as illustrated by its recent purchase of a fifty megawatt wind farm. Those waiting on a dividend should not hold their breath says the Versant analyst. Fiore suspects a “…dividend will not occur before 2014 and remains very unlikely even after that.”

Share of Boralex closed today up 1% to $8.15.