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1. Company Snapshot

1.a. Company Description

Northland Power Inc., an independent power producer, develops, builds, owns, and operates clean and green power projects in North America, Europe, Latin America, and Asia.The company produces electricity from renewable resources, such as wind, solar, or hydropower, as well as clean-burning natural gas and biomass for sale under power purchase agreements and other revenue arrangements.It owned or had an economic interest in 3.2 gigawatts of operating generating capacity.


The company was founded in 1987 and is headquartered in Toronto, Canada.

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1.b. Last Insights on NPI

Northland Power's recent performance was negatively impacted by a widening Q3 net loss and a 40% dividend cut. The company's Q3 results revealed a significant non-cash impairment, despite strong EBITDA growth. The dividend adjustment aims to fuel future expansion. Additionally, the company faces a challenging environment, with softer results expected for Canadian energy infrastructure equities. The retirement of a board member and appointment of a new director may also contribute to short-term uncertainty. RBC Capital Markets expects company headlines to overshadow results.

1.c. Company Highlights

2. Northland Power's Strategic Dividend Cut to Fuel Growth

Northland Power reported a mixed third-quarter 2025 financial performance, with adjusted EBITDA increasing 13% to $257 million, driven by the company's growing operational capabilities. However, the company reported a net loss of $456 million, primarily due to a $527 million non-cash impairment for the Nordsee One offshore wind facility. The company's actual EPS came out at -$0.23994, missing estimates of $0.165. Revenue growth is expected to be around 8.0% next year, according to analysts' estimates.

Publication Date: Nov -14

📋 Highlights
  • Dividend Adjustment:: Annual dividend reduced to $0.72/share to prioritize self-funded growth and maintain investment-grade balance sheet.
  • Financial Performance:: Adjusted EBITDA rose 13% to $257M; free cash flow surged 130% to $45M YoY.
  • Nordsee One Impairment:: $527M non-cash impairment driven by pricing transition to market rates by May 2027, contributing to $456M net loss.
  • Project Capital Expenditures:: $12B invested in Hai Long and Baltic Power projects; $5B remaining for completion.

Impairment Charge and Pricing Transition

The impairment charge was related to the pricing transition from the initial subsidy pricing regime to market pricing by May 2027. According to Jeffrey Hart, the company's Chief Financial Officer, "the company has updated its long-term production forecast and anticipates an increase in operating and maintenance costs." The company's expectation of market prices in the future is in the range of EUR 60 to EUR 70 per megawatt hour.

Dividend Cut and Capital Allocation

The company's Board of Directors decided to adjust Northland's dividend to $0.72 per share on an annual basis, a move aimed at providing greater financial flexibility for self-funded growth and maintaining an investment-grade balance sheet. Christine Healy, President and CEO, stated that this decision was necessary to "deliver best value to shareholders" and "free up more capital to invest in growth opportunities." The dividend recalibration is expected to provide funds to make accretive investments, underpinned by the cash flows of the business.

Valuation Metrics

Northland Power's current valuation metrics indicate a mixed picture. The company's P/E Ratio is -104.19, while the P/B Ratio is 1.11, and the P/S Ratio is 2.13. The EV/EBITDA ratio is 8.12, indicating a relatively reasonable valuation. The Dividend Yield is 6.78%, while the Free Cash Flow Yield is 19.69%. The Net Debt / EBITDA ratio is 4.71, indicating a relatively high debt burden. The company's ROE and ROIC are -1.08% and 1.15%, respectively, indicating a challenging profitability environment.

Growth Opportunities and Project Updates

The company has a pipeline of 8.5 gigawatts and is looking at opportunities to advance projects in the midterm development pipeline. The Hai Long project is making progress, with over half of the turbines installed, although only 2 are currently energized and generating revenue. The company expects to see progress in the new year when weather windows open up. The issue with the onshore substation has been addressed, and the company is confident in its project team's ability to manage and resolve issues.

3. NewsRoom

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Insider Buying: Northland Power President Bought CA$501k Of Shares

Nov -29

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Boomers Are Flocking to These 3 Utility Stocks for Yields Above 6%

Nov -28

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TSX Value Picks Featuring Badger Infrastructure Solutions And Two More Stocks With Estimated Discounts

Nov -26

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Northland Power Price Target Lowered to $23 at Raymond James

Nov -24

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TSX Stocks That May Be Trading Below Estimated Value In November 2025

Nov -24

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Will Northland Power’s (TSX:NPI) Renewables Expansion Strengthen Its Core European Strategy?

Nov -22

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Northland Power Downgraded to Hold at TD

Nov -21

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Greenvolt sells two energy storage projects to Northland Power

Nov -21

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.39%)

6. Segments

Offshore Wind

Expected Growth: 4.0%

Northland Power Inc.'s offshore wind segment growth is driven by increasing global demand for renewable energy, government incentives and tax credits, declining installation costs, and strategic partnerships. Additionally, the company's focus on developing large-scale projects, such as the Hai Long project in Taiwan, contributes to its 4.0 growth rate.

Onshore Renewable

Expected Growth: 3.5%

Northland Power's onshore renewable segment growth of 3.5% is driven by increasing demand for clean energy, declining renewable energy costs, and favorable government policies and incentives. Additionally, the company's strategic acquisitions and partnerships, such as the recent purchase of a majority stake in the 100 MW Grand Bend Wind Farm, contribute to its growth momentum.

Natural Gas

Expected Growth: 2.0%

Northland Power Inc.'s 2.0% growth in Natural Gas is driven by increasing demand for clean energy, government incentives for renewable energy sources, and strategic acquisitions of natural gas-fired power plants. Additionally, the company's focus on energy efficiency and cost reduction initiatives has improved operational performance, contributing to the growth.

Utilities

Expected Growth: 2.5%

Northland Power Inc.'s 2.5% growth in Utilities is driven by increasing demand for renewable energy, strategic acquisitions, and expansion into new markets. Additionally, investments in grid modernization and energy storage contribute to growth. Furthermore, favorable government policies and regulations supporting clean energy transition also boost the segment's growth.

Other

Expected Growth: 3.0%

Northland Power Inc.'s 3.0% growth is driven by increasing demand for renewable energy, strategic acquisitions, and expansion into new markets. Additionally, the company's diversified portfolio of wind, solar, and hydroelectric power generation assets provides a stable source of revenue, while its long-term power purchase agreements ensure predictable cash flows.

7. Detailed Products

Offshore Wind

Northland Power develops, constructs, and operates offshore wind farms, generating clean and renewable energy.

Onshore Wind

Northland Power develops, constructs, and operates onshore wind farms, providing clean and renewable energy.

Solar

Northland Power develops, constructs, and operates solar farms, generating clean and renewable energy.

Thermal

Northland Power develops, constructs, and operates thermal power plants, generating electricity from natural gas and biomass.

Energy Storage

Northland Power develops, constructs, and operates energy storage facilities, enabling the efficient storage and dispatch of renewable energy.

8. Northland Power Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Northland Power Inc. operates in the renewable energy sector, which has a moderate threat of substitutes. While there are alternative sources of energy, the shift towards renewable energy is increasing, reducing the threat of substitutes.

Bargaining Power Of Customers

Northland Power Inc. has a diversified customer base, including residential, commercial, and industrial customers. This diversification reduces the bargaining power of customers.

Bargaining Power Of Suppliers

Northland Power Inc. relies on suppliers for equipment and services. While there are some large suppliers, the company's scale and diversification reduce the bargaining power of suppliers.

Threat Of New Entrants

The renewable energy sector has high barriers to entry, including significant capital requirements and regulatory hurdles. This reduces the threat of new entrants.

Intensity Of Rivalry

The renewable energy sector is highly competitive, with many established players. Northland Power Inc. faces intense competition from other renewable energy companies.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 63.23%
Debt Cost 3.95%
Equity Weight 36.77%
Equity Cost 6.15%
WACC 4.76%
Leverage 171.94%

11. Quality Control: Northland Power Inc. passed 0 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Northland Power

A-Score: 6.4/10

Value: 6.6

Growth: 3.7

Quality: 4.4

Yield: 7.0

Momentum: 7.5

Volatility: 9.0

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Clearway Energy

A-Score: 5.9/10

Value: 3.4

Growth: 5.4

Quality: 3.6

Yield: 9.0

Momentum: 6.0

Volatility: 7.7

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Algonquin Power

A-Score: 5.8/10

Value: 7.2

Growth: 2.2

Quality: 2.5

Yield: 8.0

Momentum: 7.5

Volatility: 7.3

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NextEra Energy Partners

A-Score: 5.0/10

Value: 9.4

Growth: 2.9

Quality: 4.4

Yield: 10.0

Momentum: 0.0

Volatility: 3.3

1-Year Total Return ->

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Boralex

A-Score: 4.7/10

Value: 6.3

Growth: 5.2

Quality: 3.0

Yield: 4.0

Momentum: 1.0

Volatility: 8.3

1-Year Total Return ->

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Ormat Technologies

A-Score: 4.6/10

Value: 1.6

Growth: 4.7

Quality: 4.0

Yield: 0.0

Momentum: 8.5

Volatility: 8.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

17.23$

Current Price

17.23$

Potential

-0.00%

Expected Cash-Flows