Last year, Northland Power (TSX:NPI) dropped like a stone when it decided to cut its dividend. The cut came as the old payout started to feel like a tight sweater in a higher-rate world. In its third-quarter 2025 results, the board approved an adjustment to an annual dividend of $0.72 per share, down from the prior $1.20 annual pace that many investors had grown used to.
The new level kicked in with the Jan. 15, 2026, payment for shareholders of record on Dec. 31, 2025. The message was clear: protect flexibility, fund growth without stretching the balance sheet, and make the dividend fit the business instead of forcing the business to fit the dividend. But is it now a safe buy?
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Looking back
NPI is a Canada-based global power producer with a portfolio that spans offshore wind, onshore renewables, energy storage, natural gas, and a utility business. Over the last year, the dividend stock’s news has been a tug-of-war between near-term volatility and long-term buildout.
On the buildout side, two massive offshore wind projects have stayed central. Hai Long, a one-gigawatt (GW) project, continued progressing with turbine and export cable installation, but the dividend stock flagged that slower-than-expected commissioning could reduce pre-completion revenues for Northland’s share by roughly $150 million to $200 million in 2026. Baltic Power, a 1.1 GW project, also advanced with key offshore work, and the company has continued to point to first power in 2026 and full commercial operations in the second half of 2026.
At the same time, Northland tried to make the story easier to underwrite. It laid out a strategic framework aimed at disciplined growth, an investment-grade balance sheet, and more self-funded expansion. Management talked about simplifying the operating structure into regional hubs, aiming for cost optimization of more than $50 million in annual savings by 2028, and targeting free cash flow per share growth that builds toward a higher run-rate by the end of the decade.
Looking ahead
On earnings, the recent numbers explain why investors felt whiplash. In the third quarter of 2025, revenue from energy sales rose to $554 million from $491 million a year earlier, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased to $257 million from $228 million. Free cash flow (FCF) per share improved to $0.17 from $0.08, and cash provided by operating activities rose to $325 million from $196 million.
But the quarter also reported a net loss of $456 million, and it tied the loss largely to a $527 million non-cash impairment at its Nordsee One offshore wind facility. That impairment did not reflect an immediate cash drain, but it did remind investors that offshore wind economics can shift when a project approaches a transition from subsidized pricing to market pricing.
Looking forward, the near-term hinges on execution and timing. Northland continued to emphasize its major projects under construction and the cash flow step-ups it expects as projects move from build mode to operating mode, while also acknowledging that commissioning schedules can wobble. It has also pointed to a financial framework that aims to support growth without leaning on external equity issuance. This has become a sore point for investors across the renewables space. If it can deliver those projects on schedule and keep a lid on costs, the story can shift back toward growth and stability.
Bottom line
So, could it be a dividend stock to buy even with the dividend cut hanging over it? Right now, it offers a yield of 5.7% trading at 95 times forward earnings, which could still bring in ample income at recent prices with a $7,000 investment.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| NPI | $19.60 | 357 | $0.72 | $257.04 | Quarterly | $6,997.20 |
A smaller, more defendable dividend can actually be a positive if it lowers the risk of another cut and lets the company fund value-accretive projects without straining the balance sheet. It could also be a pass for anyone who bought it primarily for a high, steady payout, because the cut proves the dividend can change, and the project timeline risk remains real. The right takeaway is simple: Northland now asks to be owned for total return and execution, not just for income.
