Yahoo Finance Is Brookfield Renewable Partners Stock a Buy Now?
Written by Sneha Nahata at The Motley Fool Canada
Investing in renewable energy stocks can be appealing for multiple reasons. The sector is witnessing rapid growth driven by increasing global demand for clean energy and efforts to combat climate change. As governments announce and implement policies to cut carbon emissions and shift towards green energy sources, companies in this sector stand to gain from increased demand for their products and services.
Additionally, governments across the globe provide incentives and subsidies to support the growth of the renewable energy industry. Such incentives include tax credits, grants, and favourable regulatory policies, which can help renewable energy companies expand their operations, improve their financial performance, drive their share prices higher, and support dividend payments.
Moreover, adding renewable energy stocks to your investment portfolio will help spread risk and improve overall portfolio performance.
With this backdrop, let’s look at Brookfield Renewable Partners (TSX:BEP.UN), a top Canadian stock, to find out whether it is a buy right now to capitalize on the energy transition opportunities.
Why Invest in Brookfield Renewable Partners?
Brookfield Renewable Partners is a leading company in the green energy space thanks to its diversified portfolio of renewable power assets, including wind, solar, and hydroelectric. It owns and operates clean energy generating facilities and provides decarbonization solutions. The company is rapidly growing and has almost 33,000 megawatts of renewable power operating capacity and an approximately 155,000-megawatt development pipeline.
Notably, the bulk of Brookfield’s power output is under contractual arrangements. Moreover, these contracts have a long weighted average remaining life and safeguards against inflation. This adds stability and visibility to cash flows and drives the company’s organic growth.
Brookfield Renewable Partners consistently generates solid financials thanks to its diversified asset base and long-term contracts. This enables the company to return significant cash to its shareholders through higher dividend payments and share repurchases. Notably, Brookfield Renewables Partners’ funds from operations (FFO) sport a compound annual growth rate (CAGR) of 10% from 2012 to 2023. Furthermore, its dividend distributions increased by a CAGR of 6% during the same period.
Further, its stock has grown at a CAGR of over 13% in the past decade, gaining more than 243% in value during the same period.
Looking ahead, the company is scaling its development capabilities and pulling forward its pipeline. Notably, its advanced-stage development pipeline now stands at almost 24,000 megawatts, with just under 7,000 megawatts on track to be delivered in 2024 and 7,000 megawatts in 2025. These projects will soon fully secure power purchase agreements and construction contracts and are expected to contribute significantly to its FFO.
Further, Brookfield is diversifying its cash flows and enhancing the contracted components of its business. This move will help minimize volatility, stabilize its performance, and drive steady earnings growth.
Bottom Line
Brookfield Renewable Partners’ well-diversified assets, long-term contractual arrangements, solid developmental pipeline, and strong balance sheet position it well to capitalize on the demand for green energy. The company could continue generating solid earnings, distributing higher dividends, and delivering above-average capital gains.
The post Is Brookfield Renewable Partners Stock a Buy Now? appeared first on The Motley Fool Canada.
Should you invest $1,000 in Brookfield Renewable Partners right now?
Before you buy stock in Brookfield Renewable Partners, consider this:
The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Brookfield Renewable Partners wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.
Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $17,988!*
Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 35 percentage points since 2013*.
See the 10 stocks * Returns as of 1/24/24
More reading
Can You Guess the 10 Most Popular Canadian Stocks? (If You Own Them, You Might Be Losing Out.)
How to Build a Bulletproof Monthly Passive-Income Portfolio in 2024 With Just $25,000
Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Renewable Partners. The Motley Fool has a disclosure policy.
2024
