When it comes to companies that have stood the test of time, there aren’t many better than Constellation Software (TSX:CSU). This tech stock has proven time and again to be a solid long-term purchase. Even after shares have surged into four digits. Yet with prices so high, is it time to consider selling this stock and looking elsewhere?
Into CSU
On the plus side, Constellation remains a very strong business. The tech stock reported second-quarter (Q2) 2025 revenue of $2.844 billion, a 15 % year-over-year increase compared to the same period in 2024. Free cash flow available to shareholders rose to $220 million for the quarter. That’s up from $182 million in the same period last year. However, there are several reasons to approach with caution, which support the idea that it might be a hold or even a candidate for trimming rather than a full “buy,” though certainly not a clear “sell” just yet.
First, despite the revenue growth, Constellation’s net income took a steep hit. In Q2 2025, net income attributable to common shareholders fell 68 % to $56 million from $177 million in Q2 2024. Second, the valuation appears elevated. Even after coming down from all-time highs, it still trades at 83 times earnings. Third, while the growth story is intact, the organic growth component is modest. Q2 organic growth was reported at 5% despite total growth of 15% thanks to acquisitions.
So, while Constellation Software does not look like a must-sell stock today, it also doesn’t look like a clear “buy right now at any price” either. For an investor currently holding the tech stock, it might be a time to review exposure, lock in gains, or consider trimming, realizing that much of the future upside may be tied to successful acquisition integration and margin improvement. For a new buyer, it might pay to wait for a better price or clearer organic growth trajectory before diving in.
Consider NPI
If you’re weighing Constellation against Northland Power (TSX:NPI), it really comes down to what kind of investor you are and what kind of wealth you want to build. NPI is a classic total-return income play, a dividend stock with exposure to renewable energy projects that can deliver steady, long-term cash flow. For many investors, especially those looking for reliable income and capital stability, NPI may be the more compelling opportunity right now.
Northland Power is one of Canada’s top independent power producers, with a focus on clean and renewable energy. It develops, owns, and operates wind, solar, and natural gas facilities across Canada, Europe, Latin America, and Asia. That geographic diversity is a key advantage, giving it exposure to multiple power markets and currencies while reducing dependency on any one regulatory system. The company’s revenue is backed largely by long-term, inflation-linked contracts, often stretching 10 to 20 years, a setup that provides predictable cash flow regardless of market volatility.
Then there’s something CSU doesn’t offer: a large dividend. Currently, NPI yields 4.72%, dished out monthly, a feature income investors love. That payout is supported by solid and growing cash flow. In its second quarter of 2025, free cash flow per share came in at $0.22, comfortably covering the monthly dividend of roughly $0.10 per share. Yet where NPI really shines is in its growth pipeline. The dividend stock is expanding aggressively into offshore wind through Hai Long, Baltic Power, and Oneida Energy. Meanwhile, here’s what even $15,000 could bring in:
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| NPI | $25.37 | 591 | $1.20 | $709 | Monthly | $15,000 |
Bottom line
In short, if you’re seeking an amazing dividend opportunity rather than pure capital growth, NPI looks far more attractive than CSU today. Constellation remains a world-class company, but at its price, it’s a play for patient capital compounding — not income generation. Northland Power gives investors real yield, global growth, and exposure to one of the defining energy transitions of our time, all while paying you monthly to wait. For a TFSA or retirement portfolio focused on building lasting, tax-free income, NPI is the kind of steady, undervalued gem that can quietly grow wealth while CSU continues to trade at the top of the mountain.
