There’s no question that Canadian energy stocks have been getting a tonne of attention throughout 2026 as the war in Iran keeps oil prices volatile and energy costs remain a concern for businesses and households.
However, the opportunities in the energy sector go well beyond oil producers, especially if you’re looking for stocks to buy and hold for years.
The growing need for electricity is creating significant long-term potential too. Data centres, factories and the increasing use of electricity in transportation and homes are all adding to that demand.
And while oil prices can change quickly, building enough power capacity to meet those needs will take years. That gives companies with operating assets and new projects nearing completion plenty of room to grow in both the medium and long term.
So, if you’re looking for an underrated Canadian energy stock to buy heading into the final months of 2026, Northland Power (TSX: NPI) is one of the most intriguing to consider.
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A power producer with significant growth ahead
Northland is an ideal Canadian energy stock to buy before the end of 2026 because it already owns wind, solar, natural gas and battery storage assets across several countries, giving it an established business that generates cash flow.
However, it has also spent years investing in major projects, and the benefit of that spending is becoming easier to see.
For example, just last week, on September 29, Northland brought its Jurassic battery storage facility in Alberta online ahead of schedule and under budget. Furthermore, its entire capacity is covered by a 15-year agreement, giving the company a long-term source of revenue from an asset that is now operating.
And on top of that, its stakes in Baltic Power in Poland and Hai Long in Taiwan offer considerably more growth potential.
Baltic Power has already started supplying electricity to Poland’s grid, and this morning, Northland announced that all 76 turbines are now installed and the project remains on track for commercial operations this year, with costs in line with expectations.
Meanwhile, its Hai Long project is expected to reach commercial operations in 2027, and Northland has signed an expanded 30-year agreement that would cover all of Hai Long’s generating capacity once the remaining administrative steps are completed.
That’s important because having a major customer committed to buying the power for decades makes future revenue more predictable. And that’s not just ideal for income investors who want reliability from the dividend. It also helps Northland plan its spending and decide where to invest next.
Why it’s one of the best Canadian energy stocks to buy in 2026
Of course, while Northland’s dividend cut in 2025 was disappointing for income investors, it also left the company with more cash to put towards completing projects and funding future growth.
And with these projects continuing to come online over the next few years, Northland has a real runway for significant growth.
For example, Northland expects free cash flow of $1.05 to $1.25 per share in 2026 and targets $1.55 to $1.75 by 2030. The midpoint of that longer-term target is roughly 40% higher than the midpoint of this year’s guidance.
So, at around $22 per share, Northland trades at roughly 19 times the midpoint of its expected 2026 free cash flow. That’s not particularly cheap, but it’s not overly expensive either. The bigger reason to consider the stock is how much it can continue to grow over the coming years.
With that said, at around $22 per share, the stock also offers a yield of roughly 3.3%, so you’re already collecting reasonable income while you wait for those growth projects to move ahead.
Therefore, while oil producers continue to dominate the headlines, high-quality oil stocks can still have a place in your portfolio. Green energy stocks like Northland also have years of growth potential as the world shifts towards cleaner energy and electricity demand continues to grow.
That’s why, if you’re looking for a Canadian energy stock to buy before the end of 2026, Northland is undoubtedly one of the best candidates.
