Having a reliable source of alternative income can ease your financial worries, especially in tough economic times. While there are many ways to generate passive income, dividend investing could arguably be one of the easiest and most flexible ones. That’s why having a portion of high-quality dividend stocks in your portfolio, regardless of economic fluctuations, helps you ensure stability and secure returns.
In this article, I’ll talk about a top renewable energy-focused monthly dividend stock in Canada that I find worth buying right now.
A top Canadian renewable energy stock with monthly dividends
When you’re investing in stocks for the long term to benefit from an emerging trend, you shouldn’t forget to carefully look at a company’s ability to meet growing demand.
Keeping that in mind, Northland Power (TSX:NPI) could be a great monthly dividend stock to consider right now that’s continuing to expand its offshore wind and onshore renewables infrastructure to benefit from surging renewable power demand.
This Toronto headquartered company currently has a market cap of $8.3 billion, as its stock trades at $33.03 per share after losing 11% of its value in 2023 so far. By comparison, the TSX Composite benchmark trades with minor 0.8% year-to-date gains. At the current market price, Northland offers a 3.6% annualized dividend yield and pays its dividends on a monthly basis.
The recent declines in NPI stock could mainly be attributed to the rising possibility of a looming recession and the ongoing macroeconomic uncertainties, which have dimmed the short-term energy demand outlook. Nonetheless, Northland Power’s recent financial growth trends look impressive, which should help its share prices stage a sharp recovery in the coming years. Let’s take a closer look.
Top reasons to buy it now
Northland Power has more than 35 years of experience developing renewable energy projects and has a high-quality power infrastructure asset base with over 2.6 GW (gigawatts) of net operating capacity. To give you an idea about the strength in its financial growth trends, Northland registered a 78% increase in its revenue in the five years between 2017 and 2022. More importantly, its adjusted earnings during the same five-year period surged 307% to $3.46 per share.
The company expects its gross operating capacity to reach 6.5 GW by 2027. Currently, it’s actively developing power infrastructure assets in 12 countries with 27 projects in hand. With this, Northland has a strong development pipeline consisting of projects with more than 20 gigawatts of gross operating capacity. Given its consistent efforts to further grow the high-quality renewable energy infrastructure, you can expect NPI’s financial growth trends to improve in the long run, which should help this monthly dividend stock grow in value.
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|Prices as of Mar. 22, 2023|
If you want to earn $200 every month in passive income from its dividends, you can buy 2,000 shares of Northland Power. To buy this many shares at the current market price, however, you’ll have to invest a large sum of $66,060 in its stock right now. While this example gives you a good idea of how easily you can create a source of alternative income in Canada, you should ideally avoid investing such a big sum of money in a single stock. Instead, try to diversify your portfolio by including more such monthly dividend stocks to it.