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Here’s Why I Think Brookfield Renewable Stock Is 1 of the Best Deals on the TSX Today

Target. Stand out from the crowd
Image source: Getty Images

Written by Amy Legate-Wolfe at The Motley Fool Canada

It’s been a crazy year of share price growth and shrinkage. Some companies have been doing so well, while others have continued to fall. But as investor sentiment has started to shift, a few stocks have made a roaring comeback. One of those is Brookfield Renewable Partners (TSX:BEP.UN).

And yet, even after shares have surged in share price by about 35% in the last few months, there is even more reason to consider it as a strong deal on the TSX today.

Record earnings for the quarter

The start of the surge in share price came as Brookfield Renewable stock earned record first-quarter earnings. The renewable energy stock reported a significant increase in funds from operations (FFO), reaching US$296 million for the quarter, marking an 8% increase compared to the previous year. This robust financial performance signals to investors that the company is effectively executing its business plans and capitalizing on growth opportunities in the renewable energy sector.

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Furthermore, Brookfield Renewable stock’s financial position remains robust, with US$4.4 billion of available liquidity, enabling it to deploy significant capital into growth opportunities. The company successfully executed nearly $6 billion in financings during the quarter, demonstrating access to capital markets and investor confidence in its business strategy.

This all helped to support Brookfield Renewable stock’s decisions to increase its dividend. The company declared a quarterly distribution, signalling its commitment to returning value to shareholders. This distribution, along with the company’s target of sustainable distribution increases averaging 5-9% annually, enhances investor confidence in the company’s long-term prospects and income potential.

Landmark deal

However, the strong performance wasn’t even the highlight. Instead, investors can look forward to more coming from Brookfield Renewable stock. The company highlighted its progress in advancing development activities during the quarter, aiming to bring on approximately 7,000 megawatts of new renewable capacity within the year.

Additionally, asset recycling activities are expected to generate US$3 billion of proceeds, further strengthening the company’s financial position and providing capital for future growth initiatives. But the best was yet to come.

Brookfield Renewable stock announced a groundbreaking agreement with Microsoft, which expands on their longstanding partnership. This agreement involves delivering over 10.5 gigawatts of additional renewable energy capacity to support Microsoft’s data centre growth and artificial intelligence-powered cloud services business. Such a significant partnership not only validates Brookfield Renewable stock’s capabilities but also opens up substantial revenue opportunities in the future.

Bottom line

Brookfield Renewable stock may have been climbing recently, but it could only be the beginning. The renewable energy stock is proving that it can create earnings even during a difficult time. What’s more, companies as large as Microsoft are supporting even more growth. So, if you’re looking for a company that’s just getting started in terms of growth, then Brookfield Renewable stock is certainly one to consider — especially with a dividend yield of 5.1% now on board.

The post Here’s Why I Think Brookfield Renewable Stock Is 1 of the Best Deals on the TSX Today appeared first on The Motley Fool Canada.

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Fool contributor Amy Legate-Wolfe has positions in Brookfield Renewable Partners and Microsoft. The Motley Fool recommends Brookfield Renewable Partners and Microsoft. The Motley Fool has a disclosure policy.

2024