NCP Northland Capital Partners issued a research note on Sprott Power (TSE:SPZ), keeping its "Sector Outperform" and $1.45 target price on the developer, owner and operator of renewable energy projects.
"Through its development pipeline and proven ability to efficiently execute and integrate acquisition targets, we believe SPZ is well-positioned to deliver growth and sustainable cash flow to shareholders over the long term," Northland analyst Tania Maciver said in a note.
"We believe the market is over-discounting SPZ’s cash flow streams and development potential. Management continues to seek accretive acquisitions with a goal of operating a 500MW portfolio by 2015, which will require some acquisition growth."
Sprott Power recently announced that it closed the acquisition of Shear Wind. This milestone also established an agreement between the company and Genera Avante for the operation of Shear's assets and the future development of its project pipeline.
The company also increased its quarterly dividend to 1.625 cents per share from 1.325 Canadian cents, an increse of 23 per cent.
"The dividend increase is reflective of SPZ’s confidence in its future cash flows and the accretive earnings it expects to generate from SWX’s operating assets," the NCP analyst wrote.