NPI:CC - This 5.37% Dividend Stock Pays Cash Every Month
2024-04-03 16:10:00 ET
Investing these days can be a touch tricky, given that there are so many stocks out there that seem to be on the rise, then simply fall once more. Even dividend stocks, which have led to a lot of interest over the last few years, are looking as though they may not be a deal much longer.
However, long-term investors should still consider this strategy of buying a dividend stock for the cash but holding in the long term for returns. And if you’re interested in this method, there is one 5.37%-yielding dividend stock for you that pays cash every month .
Northland Power
Northland Power ( TSX:NPI ) is a renewable energy provider, which builds, owns, and operates renewable energy infrastructure assets around the world. The company focuses on clean and green energy solutions, including wind, solar, and efficient natural gas.
The company may be focused on Canada but also has operations in Asia, Europe, Latin America, and across North America. They are also in the process of developing a large offshore wind project in Taiwan.
What investors should like about Northland stock is that it focuses on large-scale renewable energy projects. This allows them to create enormous, stable, long-term contracts as an energy producer. In fact, it now even operates one of the largest offshore wind farms in the world in the Netherlands.
Earnings growth
Now, I could simply go into the most recent earnings report and discuss it. But I think it’s important to look beyond year-over-year data and instead look at how Northland stock has been achieving momentum over the last few quarters.
In this light, there have been significant improvements over the last year. During the second quarter, sales for Northland stock came in at $472 million. However, in the third quarter these hit $513 million, and by the fourth quarter rose to $626 million.
Gross profit was also up, rising from $427 million in the second quarter to $566 million by the fourth. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) also rose from $232 million in the second quarter to $267 million in the third and $389 million in the fourth.
The only downside was that net income was on the rise before turning to a net loss of $268 million in the fourth quarter. This came down to higher costs in the fourth quarter, including from additional projects during the quarter.
What’s next?
That all said, Northland stock now expects a strong 2024, with adjusted EBITDA hitting between $1.2 and $1.3 billion for the year. That’s compared to $1.24 billion achieved during 2023. This will likely come from a higher contribution from several of its projects, specifically from offshore wind farms, as well as lower development expenditures.
In the longer term, Northland Stock believes it can achieve substantial adjusted EBITDA growth through 2027 — especially after all of these new projects are up and running. And yet, it remains quite valuable for investors.
With a 5.37% dividend yield and trading at just 2.58 times sales and 1.44 times book value, the dividend stock looks like a steal — especially as it continues to hold a stable 77% payout ratio. So, now is certainly an excellent time to hop in on this dividend stock, especially for long-term investors.
The post This 5.37% Dividend Stock Pays Cash Every Month appeared first on The Motley Fool Canada .
Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
2024