Canada markets closed
  • S&P/TSX

    20,197.61
    +15.71 (+0.08%)
     
  • S&P 500

    3,901.36
    +0.57 (+0.01%)
     
  • DOW

    31,261.90
    +8.80 (+0.03%)
     
  • CAD/USD

    0.7821
    +0.0031 (+0.40%)
     
  • CRUDE OIL

    111.30
    +1.02 (+0.92%)
     
  • BTC-CAD

    39,003.59
    +530.10 (+1.38%)
     
  • CMC Crypto 200

    684.42
    +11.05 (+1.64%)
     
  • GOLD FUTURES

    1,859.80
    +17.70 (+0.96%)
     
  • RUSSELL 2000

    1,773.27
    -2.95 (-0.17%)
     
  • 10-Yr Bond

    2.7870
    0.0000 (0.00%)
     
  • NASDAQ

    11,354.62
    -33.88 (-0.30%)
     
  • VOLATILITY

    29.54
    +0.19 (+0.65%)
     
  • FTSE

    7,465.40
    +75.42 (+1.02%)
     
  • NIKKEI 225

    27,001.52
    +262.49 (+0.98%)
     
  • CAD/EUR

    0.7328
    -0.0044 (-0.60%)
     

Why Brookfield Renewable Is the Most Valuable Stock on the TSX Today

  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
green power renewable energy
green power renewable energy

Written by Amy Legate-Wolfe at The Motley Fool Canada

Brookfield Renewable (TSX:BEP.UN)(NYSE:BEP) has had a rough year. After reaching all-time highs of around $70 a year ago, it’s now nearing what analysts have called “the floor.” And there are unfortunately two sides to this flipping coin.

On the one hand, analysts believe Brookfield and other renewable companies on the TSX today will outperform. In fact, many continue to upgrade these stocks. At the same time, analysts also trimmed their target prices for these companies. And that includes Brookfield.

And yet, that’s what makes the company the most valuable stock on the TSX today.

Today’s situation

It’s a dire one, I’ll give you that. Brookfield Renewable seemed to have the world at its feet a year ago. The company was in the right field at the right time, with new US President Joe Biden announcing investment into renewable energy companies like Brookfield.

Yet after soaring to all-time highs, shares soon dropped in this area. This came as many realized it would be a long while before Brookfield and others would see the benefits, causing them to take their returns. This situation only worsened as the market became unstable once more.

Growth stocks have now been set aside for value stocks that can provide stable growth. In Brookfield’s case, it doesn’t seem to fall into this category. But I would argue, along with many analysts, that this is actually an opportunity in disguise.

What analysts say

BMO Nesbitt Burns analyst Ben Pham recently came out with his own opinion about the future of Brookfield and other renewable companies. While he believes the stock will soon outperform, he also cut his target from US$40 to US$38. That would be a potential upside of almost 20% as of writing.

So why the change on the TSX today? Brookfield Renewable is “one of the largest publicly traded renewable power companies with a global footprint across all key technologies, BEP is the ‘go-to’ for renewable power investment,” Pham said. He went on to say its 10% growth rate, scale, and balance sheet will allow for growth for the fund without seeking outside help.

The next decade will prove its worth

Investors have to remember, the TSX today is a scary place. We’re still in the midst of a pandemic, and that’s what the government needs to fund immediately. At the same time, governments around the world aren’t ignoring renewable energy completely. It’s therefore a great time to get in on the action before the boom.

And there will be a boom. While the first few years will be rocky, Brookfield Renewable offers a strong place to put your investment and see stable returns in the decade to come. The more the world invests, the stronger it will be. And that’s again without counting on external funding.

Don’t let the share price fool you. The third quarter delivered record-high funds from operations, with several growth opportunities executed. It continues to be the world’s leading diversified clean energy business. Therefore, it’s the most likely to benefit from the growth in clean energy around the world.

Yet shares are down 34% in the last year. In the next year, that share price is set to explode. The average target price remains at $52, giving investors a potential upside of 24% as of writing. And there’s a nice 3.69% dividend yield while you wait. That’s a value stock anyone should jump on while they have the chance.

The post Why Brookfield Renewable Is the Most Valuable Stock on the TSX Today appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Brookfield Renewable Partners Lp?

Before you consider Brookfield Renewable Partners Lp, we think you’ll want to hear this.

Our S&P/TSX market doubling* Stock Advisor Canada team just released their top 10 starter stocks for 2022 that we believe could supercharge any portfolio.

Want to see if Brookfield Renewable Partners Lp made our list? Get started with Stock Advisor Canada today to receive all 10 of our starter stocks, a fully stocked treasure trove of industry reports, two brand-new stock recommendations every month, and much more.

Click Here to Learn More About Stock Advisor Canada Today

More reading

Fool contributor Amy Legate-Wolfe owns Brookfield Renewable Partners. The Motley Fool has no position in any of the stocks mentioned.

2022

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting