Sound bite for Twitter is: Dividend Paying Utility. Results of stock price testing is that the stock price is probably cheap. Debt Ratios mostly fine, but debt is too high. The Dividend Payout Ratios (DPR) need improvement. The current dividend yield is good with dividend growth non-existent. See my spreadsheet on Northland Power Inc.
Is it a good company at a reasonable price? This company is basically based on green energy. I do not think that green energy has proven to be money maker. The EPS on this company is certainly volatile. It would not be a stock that would be my favourite utility. A lot of people think that this stock is cheap. My testing generally points in the cheap direction.
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 got a new Chairman, new CEO, and new CFO this year. Last year the old Chairman was acting CEO and they had an interim CFO. Also, the three officers I was following, including the interim CFO have left the company.
If you had invested in this company in December 2014, for $1,009.14 you would have bought 66 shares at $15.29 per share. In December 2024, after 10 years you would have received $768.24 in dividends. The stock would be worth $1,181.40. Your total return would have been $1,949.64. This would be a total return of 8.68% per year with 1.59% from capital gain and 7.09% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $15.29 | $1,009.14 | 66 | 10 | $768.24 | $1,181.40 | $1,949.64 |
The current dividend yield is good with dividend growth non-existent. The current dividend yield is good (5% to 6% ranges) at 6.12%. The 5 and 10 year median dividend yields are moderate (2% to 4% ranges) at 3.58% and 4.67%. The historical median dividend yield is good at 6.53%. This stock used to be an income trust company and therefore had high dividend yields in the past. All old income trust companies are having a hard time getting their current dividends at the right level. I have records for this company for the past 27 years and they have raised the dividend in 8 years, cut it in 2 years, and kept it the same in 17.
The Dividend Payout Ratios (DPR) need improvement. The DPR for 2024 for Earnings per Share (EPS) is too high at 117% with 5 year coverage at 94%. The DPR for 2024 for Free Cash Flow (FCF) is too high at 94% with 5 year coverage at 79%. The DPR for 2024 for Adjusted Free Cash Flow (AFCF) is too high at 78% with 5 year coverage at 30%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 23% with 5 year coverage at 21%. The DPR for 2024 for Free Cash Flow (FCF) is good at 46% with 5 year coverage at 33%. FCF varies for 20024 from $131M to $436M. Analysts think improvement will come in 2026 and 2027.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 116.50% | 94.64% |
| FCF Co. | 94.49% | 79.11% |
| AFCF | 78.43% | 65.22% |
| CFPS | 23.38% | 20.90% |
| FCF | 45.98% | 33.38% |
Debt Ratios mostly fine, but debt is too high. The Long Term Debt/Market Cap Ratio for 2024 is too high at 1.38 and currently at 1.18. The Liquidity Ratio for 2024 is too low at 1.05 and 0.91 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.58 and currently at 1.58. The Debt Ratio for 2024 is good at 1.50 and 1.53 currently. The Leverage and Debt/Equity Ratios for 2024 are fine at 2.99 and 1.99 and currently at 2.89 and 1.89.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 1.38 | 1.18 |
| Intang/GW | 0.22 | 0.20 |
| Liquidity | 1.05 | 0.91 |
| Liq. + CF | 1.58 | 1.58 |
| Debt Ratio | 1.50 | 1.53 |
| Leverage | 2.99 | 2.89 |
| D/E Ratio | 1.99 | 1.89 |
The Total Return per year is shown below for years of 5 to 27 to the end of 2024. 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. |
|---|---|---|---|---|---|
| 2019 | 5 | 0.00% | -2.82% | -8.03% | 5.20% |
| 2014 | 10 | 1.06% | 8.68% | 1.59% | 7.09% |
| 2009 | 15 | 0.70% | 10.81% | 2.74% | 8.07% |
| 2004 | 20 | 0.74% | 8.34% | 1.19% | 7.15% |
| 1999 | 25 | 1.02% | 13.73% | 3.22% | 10.51% |
| 1997 | 27 | 2.60% | 10.88% | 2.18% | 8.70% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 11.81, 19.14 and 24.45. The corresponding 10 year ratios are 13.38, 17.39 and 21.03. The corresponding historical ratios are 13.13, 15.65 and 17.89. The current ratio is 35.00 based on a stock price of $19.60 and EPS of $0.56. This ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
However, the company’s EPS for 2025 is very low. The EPS expected in 2026 is $1.65 and gives a P/E Ratio of 11.85. This ratio is between the median and high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. Another problem is that the yearly EPS varies a lot on this stock. The Adjusted Free Cash Flow is probably a better test.
I also have Adjusted Free Cash Flow (AFCF) data provided by the company. The 5-year low, median, and high median Price/ Adjusted Free Cash Flow Ratios are 11.70, 16.02 and 22.16. The corresponding 10 year ratios are 11.94, 15.30 and 17.73. The corresponding historical ratios are 13.02, 15.56 and 17.90. The current ratio is 15.43 based on a stock price of $19.60 and AFTF of $1.27. This ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $14.16. The 10-year low, median, and high median Price/Graham Price Ratios are 1.67, 1.93 and 2.30. The current ratio is 1.38 based on a stock price of $19.60. This ratio is below the low ratio of the 10 year median ratio. 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 ratio is 1.23 based on a Book Value of $4,162M, Book Value per Share of $15.91 and a stock price of $19.60. The current ratio is 71% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I also have a Book Value per Share estimate for 2025 of $15.70. This implies a ratio of 1.25 based on a stock price of $19.60 and Book Value of $4,106M. This ratio is 70% below the 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 5.28. The current ratio is 4.21 based on Cash Flow per Share estimate for 2025 of $4.66 and a stock price of $19.60. This ratio is 20.3% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 6.53%. The current dividend yield is 6.12% based on dividends of $1.20 and a stock price of $19.60. The current dividend yield is 6% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. A problem is that this test works best when dividends are increasing. Also, this stock used to be an income trust with high dividends.
I get a 10 year median dividend yield of 4.68%. The current dividend yield is 6.12% based on dividends of $1.20 and a stock price of $19.60. The current dividend yield is 31% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap. A problem is that this test works best when dividends are increasing. Also, this stock used to be an income trust with high dividends.
The 10-year median Price/Sales (Revenue) Ratio is 3.30. The current ratio is 2.18 based on Revenue estimate for 2025 of $2,353M, Revenue per Share of $9.00 and a stock price of $19.60. The current ratio is 34% 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 10 year dividend yield test says this even though it is not a dividend growth stock. The P/S Ratio test confirms this outcome. Not all testing agrees as the result vary from cheap to expensive. The P/B Ratio test is a good one and it also says that the stock price is relatively cheap.
When I look at analysts’ recommendations, I find Strong Buy (6), Buy (5) and Hold (2). The consensus would be a Strong Buy. The 12 month stock price consensus is $25.54 with a high of $30.00 and low of $20.00. The stock price consensus of $25.54 implies a total return of 36.43% with 30.31% from capital gains and 6.12% from dividends based on a current stock price of $17.90.
There are quite a number of analysts reporting on Stock Chase for this stock for 2025. All but two thinks it is a buy. One likes other utilities better than this one and the person reporting a hold think it is a hold for income and growth. The Amy Legate-Wolfe on Motley Fool likes this stock for its predictable cash flow. Robin Brown on Motley Fool likes this stock for its dividend. The company put out a Press Release about their fourth quarter of 2024. The company put out a Press Release about their second quarter of 2025.
Simply Wall Street via Yahoo Finance says it thinks this company is worth $37.28 CDN$ and therefore is undervalued. Simply Wall Street has two warnings on this stock of Interest Payments are not well covered by earnings; and dividend of 4.79% is not well covered by earnings.
Northland Power develops, constructs, and operates maintainable 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 Guardian Capital Group (TSX-GCG.A, OTC-GCAAF) ... learn more. The next stock I will write about will be FirstService Corp (TSX-FSV, NASDAQ-FSV) ... learn more on Monday, November 17, 2025 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.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
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