Is it a good company at a reasonable price? I do tend to like utility stocks, but not so much the ones into Green Energy. They all seem to have a hard time being profitable. Just because one of your stocks that you rely on for dividends cuts their dividends, that is not a good reason to sell. Look into it first. The best reaction might be to buy more. Although the problem with this stock is that it hit a peak 2021 and has been falling since. However, I think that green energy utilities generally had a run up until 2021 because of euphoria with the idea of clean energy. Personally, I am not into green energy utilities, so at this time, this is not a company I would buy.
I do not own this stock of Northland Power Inc (TSX-NPI, OTC-NPIFF). This company is into generating electric power. I have a lot invested in pipelines and I would like to have more invested in electric power as part of my utility’s investments. I read a report on this stock that said it was a good defensive stock to buy. That is, it is a good stock to hold in a stock market correction. I can certainly see the logic of using utility stocks as defensive stocks.
When I was updating my spreadsheet, I noticed that they cut their dividend by 40% in 2026. As with all dividend stock, when dividends are cut, the stock tends to drop. People who depend on dividends are generally unforgiving of a dividend cut. However, selling may not be the smartest move. It depends on what is going on at the company.
Northland Power had problems with completing some capital-intensive projects, but they seem to be back on track. I know that it is disappointing when dividends are cut, but sometimes that is necessary for the future of the company. It is better than paying dividends that the company cannot afford.
In the chart below, I am showing 5 and 10 year total growth and per year growth in columns 3 and 4. In column 5, I am showing what growth has been over the past 12 months to the end of the second quarter in 2026 and what is expected to the end of this year. The last row of the stock price growth is for the next 12 months.
| Yr | Item | Tot. Gwth | Per Year | Gwth | Coverage |
|---|---|---|---|---|---|
| 5 | Revenue Growth | 18.17% | 3.39% | 1.56% | <-12 mths |
| 5 | FCF Growth | -15.61% | -3.34% | -3.42% | <-12 mths |
| 5 | Net Income Growth | -145.23% | N/C | -13.90% | <-12 mths |
| 5 | Cash Flow Growth | 7.91% | 1.53% | -9.30% | <-12 mths |
| 5 | Dividend Growth | 0.00% | 0.00% | -40.00% | <-12 mths |
| 5 | Stock Price Growth | -60.92% | -17.13% | 26.83% | <-12 mths |
| 10 | Revenue Growth | 234.41% | 12.83% | 7.31% | <-this year |
| 10 | FCF Growth | 33.94% | 2.97% | -21.53% | <-this year |
| 10 | Net Income Growth | -14382.41% | N/C | -230.60% | <-this year |
| 10 | Cash Flow Growth | 257.66% | 13.59% | -22.81% | <-this year |
| 10 | Dividend Growth | 11.11% | 1.06% | -40.00% | <-this year |
| 10 | Stock Price Growth | -4.34% | -0.44% | 17.98% | <-12 mths |
If you had invested in this company in December 2015, for $1,007.64 you would have bought 54 shares at $18.66 per share. In December 2025, after 10 years you would have received $635.04 in dividends. The stock would be worth $963.90. Your total return would have been $1,598.94. This would be a total return of 5.94% per year with 0.44% from capital loss and 6.38% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $18.66 | $1,007.64 | 54 | 10 | $635.04 | $963.90 | $1,598.94 |
The current dividend yield is moderate with dividends cut recently. The current dividend yield is moderate (2% to 4% ranges) at 3.33%. The 5 and 10 year median dividend yields are moderate at 4.12% and 4.67%. The historical median dividend yield is good (5% to 6% ranges) at 6.52%. The dividends were cut by 40% going into 2026. Over the past 28 years, dividends have increased 8 times and declined 2 times. Dividends have been flat a lot of years.
The Dividend Payout Ratios (DPR) fine for Cash Flow and expected to be better this year for company FCF. The DPR for 2025 for Earnings per Share (EPS) is non-calculable due to negative earnings with 5 year coverage to high at 152%. The DPR for 2025 for Free Cash Flow (FCF) from the company is high at 82.19% with 5 year coverage at 82%. The DPR for 2025 for Adjusted Free Cash Flow (AFCF) is high at 82% with 5 year coverage at 70%. The DPR for 2025 for Cash Flow per Share (CFPS) is good at 22% with 5 year coverage at 22%. The DPR for 2025 for Free Cash Flow (FCF) is good at 30% with 5 year coverage at 34%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | N/C | 152.28% |
| FCF Co. | 82.19% | 81.67% |
| AFCF | 82.19% | 70.17% |
| CFPS | 22.45% | 21.93% |
| FCF | 30.16% | 34.04% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2025 is far too high at 1.30 and currently a bit better at 1.02. However, we need also to look at the Long Term Debt/Covering Assets Ratio for 2025 which is good at 0.74 and currently at 0.72 because this is an important ratio for a Utility. The Liquidity Ratio for 2025 is low at 1.07 and 1.04 currently. If you added in Cash Flow after dividends, the ratios are fine at 2.05 and currently at 1.85. The Debt Ratio for 2025 is good at 1.50 and 1.53 currently. The Leverage and Debt/Equity Ratios for 2025 are fine at 2.99 and 1.99 and currently at 2.90 and 1.90.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 1.30 | 1.02 |
| Lg Term A | 0.74 | 0.72 |
| Intang/GW | 0.23 | 0.20 |
| Liquidity | 1.07 | 1.04 |
| Liq. + CF | 2.05 | 1.85 |
| Debt Ratio | 1.50 | 1.53 |
| Leverage | 2.99 | 2.90 |
| D/E Ratio | 1.99 | 1.90 |
The Total Return per Year is shown below for years of 5 to 28 to the end of 2025. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2020 | 5 | 0.00% | -13.23% | -17.13% | 3.90% |
| 2015 | 10 | 1.06% | 5.94% | -0.44% | 6.38% |
| 2010 | 15 | 0.70% | 7.73% | 0.88% | 6.85% |
| 2005 | 20 | 0.78% | 7.88% | 0.90% | 6.98% |
| 2000 | 25 | 0.90% | 12.80% | 2.85% | 9.95% |
| 1997 | 28 | 2.51% | 10.84% | 2.09% | 8.75% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 10.17, 11.70 and 13.22. The corresponding 10 year ratios are 13.38, 17.39 and 21.03. The corresponding historical ratios are 13.11, 15.49 and 17.86. The current P/E Ratio is 27.07 based on a stock price of $22.64 and EPS estimate for 2026 of $0.84. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Free Cash Flow (FCF) Data from the company. The 5-year low, median, and high median Price/Free Cash Flow Ratios are 14.09, 17.33 and 23.07. The corresponding 10 year ratios are 12.30, 16.63 and 18.86. The corresponding historical ratios are 11.60, 14.39 and 16.48. The current P/FCF Ratio is 19.76 based on a stock price of $22.64 and FCF per share estimate for 2026 of $1.15. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $16.98. The 10-year low, median, and high median Price/Graham Price Ratios are 1.42, 1.90 and 2.14. The current ratio is 1.33 based on a stock price of $22.64. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Book Value per Share Ratio of 4.20. The current P/B Raito is 1.48 based on Book Value of $4,008, Book Value of $15.33 and a stock price of $22.64. The current ratio is 65% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a Book Value per Share estimate for 2026 of $15.76. This implies a ratio of 1.44 based on a stock price of $22.64 and Book Value of $4,121M. This ratio of 1.44 bis 66% below the current 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Cash Flow per Share Ratio of 5.09. The current P/CF Ratio is 5.38 based on Cash Flow per Share estimate for 2026 of $4.21, Cash Flow of $1,101M and a stock price of $22.64. The current ratio is 6% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get an historical median dividend yield of 6.52%. The current dividend yield is 3.18% based on dividends of $0.72 and a stock price of $22.64. The current dividend yield is 51% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. However, this is not the best test after a dividend cut.
I get a 10 year median dividend yield of 4.67%. The current dividend yield is 3.18% based on dividends of $0.72 and a stock price of $22.64. The current dividend yield is 32% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive. However, this is not the best test after a dividend cut.
The 10-year median Price/Sales (Revenue) Ratio is 3.16. The current P/S Ratio is 2.27 based on Revenue estimate for 2026 of $2,613M, Revenue per Share of $9.99 and a stock price of $22.64. The current P/S Ratio is 28% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is probably cheap. The dividend yield testing is not a good one when dividends are cut. The P/S Ratio test is saying that the stock price is relatively cheap. The Price/Graham Price Ratio test and the Price/Book Value tests are also saying that the stock price is relatively cheap. There are others that say it is expensive.
When I look at analysts’ recommendations, I find Strong Buy (4), Buy (4) and Hold (5). The consensus is a Buy. The 12 months stock price consensus is $26.71 with a high of $43.00 and low of $21.00. The 12 months stock price consensus of $26.71 implies a total return of 21.16% with 17.98% from capital gains and 3.18% from dividends based on a current stock price of $22.64.
Analysts on Stock Chase give this stock a Buy or a Hold this year. One analyst thought that the dividend cut was unnecessary and said the company made a long-term decision to solve a short-term problem. Amy Legate-Wolfe on Motley Fool thinks the company will do well because Europe is committed to great energy. Karen Thomas on Motley Fool says that the stock has turned the corner and thinks that the company will benefit from future electricity demand. The company put out a Press Release about their fourth quarter of 2025. The company put out a Press Release about their second quarter of 2026.
Simply Wall Street on Yahoo Finance says that this is a Canadian Renewable Energy Stock to watch in 2026. Simply Wall Street on Yahoo Finance looks how the company’s project affected them. Wall Street gives this stock 2 and one half stars out of 5. Simply Wall Street has two risks on this company of debt is not well covered by operating cash flow; and dividend of 3.24% is not well covered by earnings.
Northland Power develops, constructs, and operates sustainable infrastructure assets across a range of clean and green technologies, such as wind (offshore and onshore), solar, and supplying energy through a regulated utility. Offshore wind is expected to remain the company's largest segment over the long term. Northland's growth opportunities are global and span North America, Europe, Latin America, and Asia. Its web site is here Northland Power Inc.
The last stock I wrote about was about was Quarterhill Inc (TSX-QTRH, OTC-QTRHF) ... learn more. The next stock I will write about will be First Capital REIT (TSX-FCR.UN, OTC-FCXXF) ... learn more on Monday, November 9, 2026 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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