TSX:NPI

Stock Analysis Report

Executive Summary

Northland Power Inc. develops, builds, owns, and operates clean and green power projects primarily in Canada and Europe.

Rewards

Trading at 55.3% below its fair value

Earnings are forecast to grow 13.43% per year

Earnings grew by 13.3% over the past year

Risk Analysis

Debt is not well covered by operating cash flow

Unstable dividend track record



Snowflake Analysis

Proven track record average dividend payer.


Similar Companies

Algonquin Power & Utilities

TSX:AQN

Share Price & News

How has Northland Power's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NPI has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.7%

NPI

1.0%

CA Renewable Energy

-1.3%

CA Market


1 Year Return

21.2%

NPI

26.3%

CA Renewable Energy

7.7%

CA Market

Return vs Industry: NPI underperformed the Canadian Renewable Energy industry which returned 26.3% over the past year.

Return vs Market: NPI exceeded the Canadian Market which returned 7.7% over the past year.


Shareholder returns

NPIIndustryMarket
7 Day0.7%1.0%-1.3%
30 Day6.8%8.0%0.7%
90 Day10.1%10.0%1.0%
1 Year27.3%21.2%32.5%26.3%11.3%7.7%
3 Year43.5%23.9%42.9%23.7%15.5%5.1%
5 Year142.5%86.6%79.8%39.5%38.4%18.0%

Price Volatility Vs. Market

How volatile is Northland Power's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Northland Power undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NPI (CA$27.68) is trading below our estimate of fair value (CA$61.87)

Significantly Below Fair Value: NPI is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: NPI is good value based on its PE Ratio (16.2x) compared to the Renewable Energy industry average (18.1x).

PE vs Market: NPI is poor value based on its PE Ratio (16.2x) compared to the Canadian market (15x).


Price to Earnings Growth Ratio

PEG Ratio: NPI is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: NPI is overvalued based on its PB Ratio (6.5x) compared to the CA Renewable Energy industry average (1.8x).


Next Steps

Future Growth

How is Northland Power forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

13.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NPI's forecast earnings growth (13.4% per year) is above the savings rate (1.4%).

Earnings vs Market: NPI's earnings (13.4% per year) are forecast to grow faster than the Canadian market (10.7% per year).

High Growth Earnings: NPI's earnings are forecast to grow, but not significantly.

Revenue vs Market: NPI's revenue (7.9% per year) is forecast to grow faster than the Canadian market (4.9% per year).

High Growth Revenue: NPI's revenue (7.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if NPI's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Northland Power performed over the past 5 years?

58.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NPI has high quality earnings.

Growing Profit Margin: NPI's current net profit margins (19.2%) are higher than last year (17.3%).


Past Earnings Growth Analysis

Earnings Trend: NPI has become profitable over the past 5 years, growing earnings by 58.8% per year.

Accelerating Growth: NPI's earnings growth over the past year (13.3%) is below its 5-year average (58.8% per year).

Earnings vs Industry: NPI earnings growth over the past year (13.3%) exceeded the Renewable Energy industry -28.4%.


Return on Equity

High ROE: Whilst NPI's Return on Equity (31.7%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Northland Power's financial position?


Financial Position Analysis

Short Term Liabilities: NPI's short term assets (CA$1.3B) exceed its short term liabilities (CA$1.3B).

Long Term Liabilities: NPI's short term assets (CA$1.3B) do not cover its long term liabilities (CA$7.8B).


Debt to Equity History and Analysis

Debt Level: NPI's debt to equity ratio (541.7%) is considered high.

Reducing Debt: NPI's debt to equity ratio has increased from 236.8% to 541.7% over the past 5 years.

Debt Coverage: NPI's debt is not well covered by operating cash flow (15.2%).

Interest Coverage: NPI's interest payments on its debt are well covered by EBIT (3x coverage).


Balance Sheet

Inventory Level: NPI has a high level of physical assets or inventory.

Debt Coverage by Assets: NPI's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

What is Northland Power's current dividend yield, its reliability and sustainability?

4.34%

Current Dividend Yield


Dividend Yield vs Market

company4.3%marketbottom25%2.0%markettop25%5.7%industryaverage4.4%forecastin3Years4.5%

Current dividend yield vs market & industry

Notable Dividend: NPI's dividend (4.34%) is higher than the bottom 25% of dividend payers in the Canadian market (2.03%).

High Dividend: NPI's dividend (4.34%) is low compared to the top 25% of dividend payers in the Canadian market (5.74%).


Stability and Growth of Payments

Stable Dividend: NPI's dividend payments have been volatile in the past 10 years.

Growing Dividend: NPI's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (70.4%), NPI's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NPI's dividends in 3 years are forecast to be covered by earnings (72.6% payout ratio).


Next Steps

Management

What is the CEO of Northland Power's salary, the management and board of directors tenure and is there insider trading?

2.3yrs

Average management tenure


CEO

Mike Crawley 0

1.3yrs

Tenure

CA$1,195,182

Compensation

Mr. Mike Crawley is a Chairman at Ontario Energy Association since October 2019. Mr. Crawley serves as Chief Executive Officer at Northland Power Incorporated since August 04, 2018 and has been its Preside ...


CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD904.08K) is below average for companies of similar size in the Canadian market ($USD2.87M).

Compensation vs Earnings: Mike's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.3yrs

Average Tenure

Experienced Management: NPI's management team is considered experienced (2.3 years average tenure).


Board Age and Tenure

5.6yrs

Average Tenure

Experienced Board: NPI's board of directors are considered experienced (5.6 years average tenure).


Insider Trading

Insider Buying: NPI insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyCA$99,89824 Sep 19
Mike Crawley
EntityIndividual
Role
Chief Executive Officer
CEO & President
Shares4,140
Max PriceCA$24.13
SellCA$3,102,80625 Jun 19
John Brace
EntityIndividual
Role
Member of the Board of Directors
Director
Shares121,600
Max PriceCA$25.52
SellCA$3,449,94010 Jun 19
John Brace
EntityIndividual
Role
Member of the Board of Directors
Director
Shares136,900
Max PriceCA$25.22
SellCA$13,602,71807 Jun 19
John Brace
EntityIndividual
Role
Member of the Board of Directors
Director
Shares541,500
Max PriceCA$25.18
SellCA$862,502,32205 Apr 19
James Temerty
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares36,938,000
Max PriceCA$23.35

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Paul Bradley

    Chief Financial Officer

    • Tenure: 8.7yrs
    • Compensation: CA$1.95m
  • Linda Bertoldi

    Secretary & Director

    • Tenure: 9.9yrs
    • Compensation: CA$105.50k
  • Barb Bokla

    Manager of Investor Relations

    • Tenure: 0yrs
  • Mike Crawley

    CEO & President

    • Tenure: 1.3yrs
    • Compensation: CA$1.20m
  • Michael Shadbolt

    VP & General Counsel

    • Tenure: 0yrs
    • Compensation: CA$667.41k
  • David Timm

    Senior Director of Public Affairs

    • Tenure: 0yrs
  • Troy Patton (50yo)

    Chief Operations Officer

    • Tenure: 2.3yrs
    • Compensation: CA$1.03m
  • Adam Beaumont

    Senior Director of Corporate Finance

    • Tenure: 0yrs
  • Morten Melin (51yo)

    Executive Vice President of Construction

    • Tenure: 2.3yrs
    • Compensation: CA$760.81k
  • Wassem Khalil

    Senior Director of Investor Relations & Strategy

    • Tenure: 0yrs

Board Members

  • Barry Gilmour

    Independent Director

    • Tenure: 5.6yrs
    • Compensation: CA$117.50k
  • Jim Temerty

    Chairman of the Board

    • Tenure: 22.9yrs
    • Compensation: CA$250.00k
  • Linda Bertoldi

    Secretary & Director

    • Tenure: 9.9yrs
    • Compensation: CA$105.50k
  • John Brace (61yo)

    Director

    • Tenure: 1.7yrs
    • Compensation: CA$2.59m
  • Keith Halbert

    Independent Director

    • Tenure: 0.6yrs
  • Russ Goodman (66yo)

    Independent Director

    • Tenure: 5.6yrs
    • Compensation: CA$139.90k
  • Marie Bountrogianni

    Independent Director

    • Tenure: 10.9yrs
    • Compensation: CA$128.00k

Company Information

Northland Power Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Northland Power Inc.
  • Ticker: NPI
  • Exchange: TSX
  • Founded: 1987
  • Industry: Independent Power Producers and Energy Traders
  • Sector: Utilities
  • Market Cap: CA$4.991b
  • Shares outstanding: 180.44m
  • Website: https://www.northlandpower.com

Number of Employees


Location

  • Northland Power Inc.
  • 30 Street Clair Avenue West
  • Suite 1200
  • Toronto
  • Ontario
  • M4V 3A1
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NPITSX (The Toronto Stock Exchange)YesCommon SharesCACADApr 1998
NPIF.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDApr 1998
1NRDB (Deutsche Boerse AG)YesCommon SharesDEEURApr 1998

Biography

Northland Power Inc. develops, builds, owns, and operates clean and green power projects primarily in Canada and Europe. The company produces electricity from renewable resources, such as wind, solar, or h ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/05 00:35
End of Day Share Price2019/12/04 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.