CA - Northland Power Preferred Shares: As Good As It Gets

2024-03-13 03:11:46 ET

Summary

• Series 2 preferred shares of Northland Power offer a better return on investment over the next six months than common shares.
• The completion of three flagship projects in 2027 is expected to increase Adjusted EBITDA, but no significant growth is projected for 2024.
• The NPI.PR.B preferred shares have a higher dividend yield of approximately 10.51% and are a good investment option in the short term.
• The decrease in the interest rates later this year will likely create a strong tailwind for both common shares and the preferred ones.

Investment Case

For the next 6 months, Series 2 preferred shares of Northland Power Inc. ( NPI.PR.B:CA ) seem to provide a better return on investment than the company’s common shares (NPI:CA). Northland’s common shares are better suited as a longer-term investment, as the company’s valuation heavily relies on the increase in EBITDA and Cash Flow after the completion of the three flagship projects 3 years down the road....

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