When a utility’s fundamentals remain intact, its plan remains investable, and its long-term earnings path doesn’t change despite temporary headwinds, a lower stock price can turn into one of the safest long-term opportunities on the planet. TSX. It does that too Northland Power (TSX:NPI) does this pattern fit?
The basics are there
Firstly, what is attractive about Northland Power? At its core, it builds and operates renewable and conventional energy infrastructure across Canada and beyond. That gives it a story that is attractive to long-term investors who believe in the energy transition. There are projects underway that could unlock future growth and cash flow.
In fact, the recent strategic update revealed an ambition to double gross operating capacity to seven gigawatts (GW) by 2030, implement a cost savings program and target free cash flow per share of $1.55 to $1.75 by 2030. On paper, this lays a foundation for growth and a PEG-like case where the current low share price could deliver a rebound if they follow through.
What happened
Why did the stock fall so sharply? The dividend stock reported its Q3 2025 results and showed positive revenue growth of $554 million, up from $491 million a year ago. Additionally, it reported higher free cash flow of $0.17 per share versus $0.08. But despite that, it posted a significant net loss of $456 million, and crucially announced a cut to its annual common stock dividend from $1.20 to $0.72 per share.
That cut alone caused a major shift in investor sentiment, as many had bought NPI expecting dividends to be stable or growing, and the surprise cut caused panic. In addition, the dividend share indicated that turbine commissioning at the Hai Long offshore wind project is slower than expected, with a potential delay in pre-completion revenues in 2026 of approximately USD$150 to USD$200 million for the Northland share of the project. That combination of unexpected project timing, high net loss and a dividend reset created a perfect storm in which the stock fell.
Considerations
So is it “magnificent” and worthy of being held forever today? That could be possible, but with big notes. The benefit is real. If Northland executes on its 2030 plan, increases capacity, brings projects online on time and restores dividend credibility, a low price could reward long-term investors.
But the risks are also significant. The current dividend yield of 6.4% is generous, but based on a dividend policy that has just changed, and the dividend stock remains unprofitable on an IFRS basis. Project delays, construction risks, regulatory/subsidy risks and implementation risks are all of great importance. A forever hold requires you to have a strong belief in management’s ability to deliver results, and accept that the dividend may be volatile until the company achieves more stable cash flow.
In short
NPI could be a compelling contrarian play with significant upside, but it’s not yet the safe, boring dividend stock for conservative forever-holders. For now, investors can collect a dividend and hope there are no further cuts. Here’s what $7,000 could get you in that case.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL ANNUAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| NPI | $16.80 | 416 | $0.72 | $299.52 | Monthly | $6,988.80 |
If you are comfortable with the risk and are focused on long-term growth rather than just steady income, then this may be a position worth taking. But if you need predictable dividends and low volatility, you can wait until execution improves before diving in.
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