When markets pull back, long-term investors often look for bargains with a steady income. Utilities tend to fit that bill. And on the TSX, Northland Power (TSX:NPI) is one stock that’s now trading at a noticeable discount. Between its generous dividend and long-term green energy outlook, it may be one of the most compelling value plays in the sector right now.
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The stock
Northland Power shares are down almost 60% since heights reached in the last five years. Just one year ago, the stock was hovering near $27 and has since dropped to around $20 per share as of writing. That’s quite a markdown for a company that still pays a strong monthly dividend and continues to invest in future growth. The dividend, currently at $0.10 per share every month, works out to $1.20 annually. At the current share price, that’s a yield of around 5.8%.
So, why is Northland Power trading at a discount? Like many renewable energy companies, it has been hit by rising interest rates. Long-term projects financed by debt become more expensive in a high-rate environment. Northland also saw some underperformance in recent quarters, particularly from its offshore wind segment. In its latest earnings release for the first quarter (Q1) of 2025, the company reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $361 million, down from $454 million a year earlier. Net income was $111 million, compared to $149 million the year before. Revenue from energy sales also declined to $649 million, down from $755 million.
Most of that drop came from weaker wind conditions in Europe, which impacted production at offshore sites like Gemini and Nordsee One. Other parts of Northland’s business, including its natural gas facilities and regulated utility segment, performed well. These assets help offset the volatility of renewables and provide cash flow stability.
Future outlook
It’s also worth noting that Northland isn’t standing still. The company is currently building out major offshore wind projects, including Hai Long in Taiwan and Baltic Power in Poland. These are large, long-term developments expected to contribute significant cash flow once operational. Baltic Power alone is expected to produce enough electricity to power 1.5 million homes in Europe. Construction is underway and expected to be completed by late 2026. These projects are not just about expansion. These represent a path toward long-term growth in a market where demand for clean energy continues to rise.
Another important point for investors is Northland’s commitment to its dividend. Management has made it clear that returning cash to shareholders is a priority. Even during recent quarters of lower earnings, the dividend was maintained, thanks to the company’s diversified portfolio and predictable cash flows from long-term contracts.
Northland Power trades at a discount today not because the business is broken but because it’s facing cyclical pressure. High rates, short-term wind fluctuations, and investor sentiment have weighed on the stock. But the fundamentals remain intact. The world is still moving toward renewables. Governments are backing green energy projects. And Northland’s development pipeline continues to grow.
Bottom line
If you’re looking to lock in a high dividend yield with the potential for price recovery, Northland Power offers both. It’s not a flashy tech stock. It’s not going to double overnight. But it is a company with a clear strategy, essential assets, and reliable income, all wrapped in a discounted share price.
