Northland Power Inc (NPI.TO)

They have a lot of money to spend to develop one of their offshore projects in Europe. It is probably going to require them to do some kind of equity raise, either on a preferred or common share basis. The market knows this and it has been anticipating this. They recently made a sale of some of their other properties. This is going to be a heavy tax on the dividend over the next few years, but they indicated they are going to maintain the dividend. A dividend increase would probably be 2-3 years out.

He is surprised at the price reaction. It is an independent renewable power company with renewable contract terms. Dividend is covered. They have a pretty good drip program so the payout is only 80% today. There is a bit of an equity raise coming up. He has a lot of respect for the management team. You should be very happy with the yield.

As far as the general energy is concerned, these stocks tend to be a little bit safer as power producers. You don’t get quite the volatility. This wouldn’t be one of his favourites, as he tends to go with some of the bigger power companies. This is a solid, safe one. If you want some energy exposure, without the volatility of oil and gas, this would be alright.

Toronto Dominion (TD-T) or Northland Power (NPI-T) for dividends? Doesn’t know if he would be adding money to banks at this time. You probably want to buy this one down here. Slightly riskier than the banks, but has come off quite a little bit with concerns about their European operations, which he thinks are going to be just fine.

Great company, but he thinks we are going into a rising interest rate environment. This will get slaughtered along with some of the other yield names. Thinks you are looking at 10%-15% downside. You’re okay for now, but 6 months to year from now, he would be exiting this name.

A good track record of power projects. Just won an international wind project. The management team is very well aligned and own 39% of the company.

Announced they were going to do a pretty big Buy, project Gemini, which is a lot to take on for a small company and the stock came down. As they started to execute and put their financing together, the stock had a nice rise. They then announced a wind farm project. This will be dilutive for them and will suppress the share price. All things being equal, he would be Buying down here because the same thing is going to happen again. These guys are very skilled at having projects come on time and on delivery.

Dividend is stable with a payout ratio of 100%. They are going through a CapX program right now with the Gemini project, an offshore European wind project. Comes online in 2017-2018, and when that happens the dividend payout ratio will immediately drop to 80%-85%. Management has a tendency to go through CapX cycles pretty extensively, so there is a potential that Gemini could come online, the payout ratio dips into the 80%s, and then they undertake another CapX program, which would keep the payout ratio high. They are always investing in high return/high growth businesses. 5.5% yield.

Roughly 21% of its EBITDA is going to be generated by solar power. Currently trading at 18X earnings. His target price is roughly $21. Solar power makes more sense as you see oil prices going up. 5.8% dividend yield is a little bit rich.

You won’t see much capital appreciation during the next year or 2. Somewhat fairly valued here. Longer term he expects you will see disproportionate dividend growth. This is an independent power producer with a significant renewable portfolio. The biggest asset for them is going to be their Gemini wind project, and offshore wind development in Europe. This doesn’t start kicking out cash flow until 2017, so in the interim, you have to wait for that to get built, and you are not going to see much in the way of dividend growth until a couple of years later.

Very attractive dividend growth model. Have a lot of growth projects coming on stream. Last year they embarked on an offshore wind project which will continue to drive growth over the next number of years. Not cheap, so be a little bit patient about accumulating.

(A Top Pick April 26/13. Up 3.35%.) This is one that he would be adding to new portfolios. 6.3% yield.

He rates it at a sector outperform. He has been moving between utilities. They are all good and solid and are needed no matter what.

Have 105% payout ratio. Not cheap. They are engaging in a project in Europe, which he thinks will help fund their growth, so through that, he believes the payout will actually be safe. You will probably only get your dividend for the next little while until the market starts to see that they are executing well on Gemini and that it is really worth the risks.

Likes this company and the sector of power utilities and power generation. A steady place to be. The drop in the stock gives you a pretty good entry point. 7% yield.