Sustainable Power & Infrastructure Split Corp. is an closed-ended investment equity fund launched and managed by Brompton Funds Limited. The fund invests in dividend-paying securities of power and infrastructure companies. It employs fundamental, and quantitative analysis to make its investments. Sustainable Power & Infrastructure Split Corp. was formed in 2021 and is domiciled in Canada.

Canada

Sustainable Power & Infrastructure Split Corp.

Financial Services

The company tries to pay dividends regularly but only sometimes does so. It has paid dividends in roughly half the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are somewhat mixed. In the past 12 months, the dividend yield has been strong and significantly above its peers. At the same time, the average five-year yield has been significantly higher and exceeded nearly all its peers. On average, the company pays dividends every one and a half months, which may appeal to investors valuing a regular income stream. 

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 14ppts over six months and grown 5ppts slower in the past month. At the same time, the stock's performance relative to its the peers from the same country and sector is different. It underperformed these peers by 17ppts over six months and grew 6ppts slower in the past month. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.3 in the past several years. This ratio implies a weak shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

PWI.TO has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is usually quite stable and is somewhat unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note resilient historical revenue growth, low margin volatility, adequate interest coverage, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, bleak profitability, negligible return on capital, and poor working capital management.

In highly turbulent market conditions, PWI.TO is as volatile as an index. In other words, the stock will move with the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be limited. 

In normal market circumstances, PWI.TO is moderately volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move slightly wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to negligible. 

Based on key historical and expected multiples, the stock is undervalued relative to its peers. In particular, the stock is underpriced on P/E, 'cheap' on EV/EBITDA, undervalued on P/FCF. 

Sustainable Power & Infrastructure Split Corp.

CA$ 8.1

5

Sustainable Power & Infrastructure Split Corp.

CA$ 8.1

5

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

CA$ 8.1

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