Monthly Dividend Stock In Focus: Northland Power

Updated on April 9th, 2025 by Felix Martinez

Northland Power (NPIFF) has two appealing investment characteristics:

#1: It is offering an above-average dividend yield of 6.3%, which is more than four times the 1.5% dividend yield of the S&P 500.#2: It pays dividends monthly instead of quarterly.Related: List of monthly dividend stocks

You can download our full Excel spreadsheet of all monthly dividend stocks (along with metrics that matter, like dividend yield and payout ratio) by clicking on the link below:

Northland Power’s combination of an above-average and monthly dividend yield makes it appealing to individual investors.

But there’s more to the company than just these factors. Keep reading this article to learn more about Northland Power.

Business Overview

Northland Power is an independent power producer that develops, builds, owns, and operates green power projects in North America, Europe, Latin America, and Asia. The company produces electricity from renewable resources, such as wind, solar, hydroelectric power, and clean-burning natural gas and biomass for sale under power purchase agreements and other revenue arrangements. Northland Power owns or has an economic interest in 3.2 gigawatts of generating capacity. The company was founded in 1987 and is headquartered in Toronto, Canada.

Northland Power greatly benefits from a strong secular trend, namely the shift of the entire world from fossil fuels to clean energy sources. This shift has dramatically accelerated since the onset of the coronavirus crisis about three years ago.

The tailwind from this secular trend is clearly reflected in Northland Power’s growth trajectory.

Source: Investor Presentation

The company has expanded from just one country in 2015 to seven countries now. During this period, Northland Power has essentially tripled its generating capacity.

Thanks to its essential nature and high-growth mode of business, Northland Power proved essentially immune to the coronavirus crisis. In addition, thanks to its ability to pass on its increased costs to its customers, the company has proved resilient in the highly inflationary environment prevailing right now.

Growth Prospects

As mentioned above, Northland Power has a major growth driver in place, namely the global shift from fossil fuels to renewable energy sources. This shift has greatly accelerated in the last three years and has decades to run.

It is also important to note that most renewable energy sources had high production costs in the past, and thus, they needed government subsidies to become economically viable. However, thanks to major technological advances, this is not the case anymore. The production cost of solar and wind energy has pronouncedly decreased, and hence, renewable energy sources can easily replace fossil fuels nowadays. To provide a perspective, the cost of solar power has decreased from more than $4 per watt to less than $1 per watt over the last decade.

The primary growth drivers of Northland Power are depicted in the chart below.

Source: Investor Presentation

The company has several growth projects under development right now, with a total capacity of 2.4 GW. As the company’s current generating capacity is only 3.4 GW, it is evident that Northland Power has immense growth potential over the next several years.

Northland Power ended 2024 strong, hitting the high end of its financial guidance. Annual revenue rose to $2.35 billion and net income hit $371 million, reversing a loss in 2023. Adjusted EBITDA increased to $1.26 billion, though Free Cash Flow per share declined to $1.27 from $1.68. Christine Healy officially became CEO in January 2025.

The company advanced key projects, including Hai Long, Baltic Power, and Oneida. Hai Long is over 50% complete and expected to deliver power in late 2025. Baltic Power began offshore construction, targeting full operations in 2026. Oneida is nearly ready and set to go live in early 2025. Northland also completed a 23 MW upgrade to its Thorold facility and expanded its EBSA credit facility.

Northland updated its Dividend Reinvestment Plan, removing the 3% discount and moving to market share purchases. With $1.1 billion in liquidity and strong project execution, the company is well-positioned for continued growth in the clean energy space.

Dividend & Valuation Analysis

Northland Power currently offers an above-average dividend yield of 6.3%, more than four times the 1.5% yield of the S&P 500. The stock is thus an interesting candidate for income-oriented investors, but the latter should be aware that the dividend is affected by the fluctuation of the exchange rate between the Canadian dollar and the USD.

Northland Power has a payout ratio of over 100% but a healthy balance sheet, with a stable BBB credit rating from S&P. Given its promising growth prospects and resilience to recessions, its dividend (in CAD) should be considered safe with some risk if earnings do not improve.

On the other hand, investors should note that Northland Power has failed to grow its dividend meaningfully over the last decade, primarily due to the devaluation of the Canadian dollar vs. the USD. As a result, it is prudent not to expect meaningful dividend growth going forward.

Final Thoughts

Northland Power is thriving right now, with record earnings in 2022. Even better, the company has ample room to continue growing for decades. Moreover, the stock offers an above-average dividend yield of 6.3% and a high payout ratio. It thus combines many positive features suitable not only for income-oriented investors but also for growth-oriented investors.

However, investors should be aware that the stock is highly volatile during periods when its growth decelerates. Therefore, only patient investors, who can ignore short-term pressure and remain focused on the long run, should consider purchasing this stock.

Moreover, Northland Power is characterized by exceptionally low trading volume. This means that it is hard to establish or sell a large position in this stock.

Don’t miss the resources below for more monthly dividend stock investing research.

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