When the stock market decides to take a nosedive, it’s natural to feel a tad queasy about your investments. But fear not! Focusing on resilient dividend stocks can provide both comfort and income during turbulent times. Let’s shine a spotlight on two Canadian mid-cap powerhouses: Capital Power (TSX: CPX) and Northland Power (TSX: NPI).
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Capital Power
Capital Power is an independent power producer based in Edmonton, Alberta. The dividend stock owns and operates a diverse fleet of power generation facilities across North America, utilizing natural gas, wind, and solar energy sources. This diversification helps mitigate risks associated with any single energy source.
In its third-quarter 2024 results, Capital Power reported revenues of $1,030 million — a slight decrease from $1.15 billion in the same period of 2023. Net income attributable to shareholders was $179 million, down from $274 million the previous year. Despite these declines, the company maintained solid adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $401 million.
Over the past few years, Capital Power demonstrated consistent performance, with steady revenue growth and a commitment to transitioning towards cleaner energy sources. The company’s Genesee Generating Station achieved a significant milestone by being off coal, underscoring its dedication to sustainability.
Looking ahead, Capital Power is focusing on expanding its renewable energy portfolio and enhancing operational efficiency. The forward dividend yield stands at approximately 4.83%, making it an attractive option for income-focused investors.
Northland Power
Toronto-based Northland Power specializes in developing, building, owning, and operating clean and green global power infrastructure assets. The portfolio includes offshore and onshore wind, solar, and efficient natural gas energy projects.
In the third quarter of 2024, Northland reported sales of $491 million, a slight decrease from $513 million in 2023. The dividend stock faced a net loss of $191 million, compared to a net income of $43 million the previous year. This downturn was partly due to a cable outage at their Gemini offshore wind facility.
Despite this hiccough, Northland has a history of robust performance, with significant growth in renewable energy projects. The commitment to sustainability and expansion into international markets positions the dividend stock well for future growth. The future looks bright for Northland, with ongoing projects like the Hai Long offshore wind project in Taiwan and the Baltic Power offshore wind project in Poland. These initiatives are expected to bolster their renewable energy capacity and drive future earnings.
Bottom line
Both Capital Power and Northland Power offer exposure to the growing renewable energy sector, which is less susceptible to economic downturns. The commitment to sustainable energy solutions aligns with global trends towards decarbonization.
Moreover, both offer attractive dividend yields to provide a steady income stream. This can be particularly comforting during market volatility. Investing in dividend stocks with stable cash flows and essential services can help anchor your portfolio when the broader market is in turmoil.
So, while no investment is entirely risk-free, Capital Power and Northland Power present compelling cases as resilient dividend stocks. The focus on renewable energy, consistent performance, and attractive dividends make them worthy considerations for investors looking to navigate market sell-offs with a bit more confidence.
