This Top Renewables Stock Is an All-Weather Buy

Brookfield Renewable Partners L.P. (TSX:BEP.UN)(NYSE:BEP) is a leading player in the growing trend towards green energy. Here’s why it’s a buy.

| More on:
Solar panels and windmills

Image source: Getty Images

Investors concerned about the global economy are no doubt already looking into recession-proofing their portfolios at the moment. However, one key area of both defensiveness and steep capital gains is the green energy sector. Here are a few reasons why Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP) is such a strong addition to a portfolio right now.

Green energy is an international megatrend

Why are renewables a good play right now? For one thing, the sheer amount of capital that will end up getting pumped into green energy solutions over the next decade will likely be vast – indeed, it will have to be in order to meet and replace the fossil fuel network that’s currently the norm.

Gradual growth since the start of the month makes Brookfield one of the better dividend-dishing renewables on the TSX, which, despite its popularity, still has a tasty 4.85% yield on offer. The Brookfield family of stocks is suitably high-quality, representing a canny business model that involves buying quality assets and developing them using its trademark expertise, and its renewables offering is no different.

The market is cottoning on to the fact that Brookfield represents the best the green energy sector has to offer, with a spread of expertly managed assets collated and run by world-class asset managers to generate defensive and diversified passive income. From hydroelectric to wind and solar energy operations across the Americas, Europe, and beyond, Brookfield has a stable international footprint.

The time to prepare is now

The warning signs of recession are gathering: a downturn in U.S. job creation, spreading economic contraction across industries and continents, fiscal stimulation already underway at central banks around the world… and all of this ahead of Brexit, the Canadian federal election, and now a possible impeachment process in the U.S. Plus even the most bullish analysts expect no more than postponement in the upcoming China tariff talks.

Take Sweden for instance. Investors in Canada might not be paying too much attention to the ancestral home of ABBA right now, but perhaps they should. Sweden is considered an indicator nation for the rest of the E.U., with its liberalized, open market economy, and its manufacturing data has recently dived to 2008 levels.

With manufacturing weakness in Germany and Sweden, and facing an unruly Brexit, the E.U. could be staring down the barrel of a widespread recession. Given that Sweden’s economy is strongly tied to the global manufacturing cycle, one could say that the Scandinavian nation is a bellwether not only for Europe but for the global economy in general. A top answer for Canadians investors? Energy investment with a farsighted, broad-horizon approach.

The bottom line

Combined with the political and economic uncertainty in the U.S., the global outlook is clouding over. That’s why now is the time to start getting into defensive stocks – but critically, ones that also provide growth. Renewables tick all the right boxes, and with Brookfield’s world-class asset management expertise and diversified areas of business, it’s a solid play for longevity, capital appreciation, and passive income.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. Brookfield Renewable Partners is a recommendation of Stock Advisor.

More on Dividend Stocks

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

Man with no money. Businessman holding empty wallet
Dividend Stocks

2 Stocks Under $50 New Investors Can Confidently Buy

There are some great stocks under $50 that every investor needs to know about. Here’s a look at two great…

Read more »

think thought consider
Dividend Stocks

Down 10.88%: Is ATD Stock a Good Buy After Earnings?

Alimentation Couche-Tard (TSX:ATD) stock might not be the easy buy-case it once was. Here’s a look at what happened.

Read more »

money cash dividends
Dividend Stocks

TFSA Dividend Stocks: Earn $1,200/Year Tax-Free

Canadian stocks like Fortis are a must-have in your portfolio to earn tax-free yields for decades.

Read more »

sale discount best price
Dividend Stocks

1 Dividend Stock Down 11 Percent to Buy Right Now

Do you want a great dividend stock down 11% that can provide years of growth potential? Here's one heavily discounted…

Read more »

Growth from coins
Dividend Stocks

1 Grade A Dividend Stock Down 11% to Buy and Hold Forever 

If you're looking for the right dividend stock at the right price, you're going to want to consider this insurance…

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

Are you looking for dividend stocks to buy right now? Here are two top picks!

Read more »

edit Taxes CRA
Dividend Stocks

Tax Time: How to Keep More of Your Money

Nearly everyone hates paying taxes, although Canadians can lessen the financial pain with the right tax strategies.

Read more »