The Motley Fool

Fight Climate Change With This Dividend Stock

Image source: Getty Images

Larry Fink is the CEO of BlackRock, Inc., which manages more than $7 trillion in assets. It’s not far off to say it owns a piece of nearly every publicly traded company on the planet. Its influence and power cannot be understated, which is why Larry Fink’s latest letter to shareholders caused such an uproar.

Last month, the New York Times reported that BlackRock would now make investment decisions “with environmental sustainability as a core goal.” The firm would immediately exit positions that face high sustainability-related risks, like coal producers. Over time, BlackRock will pressure every company to make sustainability a primary focus.

“Awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance,” Fink wrote in the letter. “The evidence on climate risk is compelling investors to reassess core assumptions about modern finance.”

According to the New York Times, BlackRock will “… introduce new funds that shun fossil fuel-oriented stocks, move more aggressively to vote against management teams that are not making progress on sustainability, and press companies to disclose plans for operating under a scenario where the Paris Agreement’s goal of limiting global warming to less than two degrees is fully realized.”

If you’re invested in fossil fuels, or even simply companies with a large carbon footprint like airlines and automobile manufacturers, the future is bleak — at least that’s what Fink is arguing. The fact that he has $7 trillion to back up his vision makes his claims all the more credible.

If Fink is right, trillions of dollars will be reallocated to companies that are fighting global climate change and pushing for a more sustainable world. He’s looking to prevent his firm from the fallout of this shift just as much as he’s pushing for an environmental agenda.

There are several stocks that should profit from the capital reallocation, but one in particular sticks out as an attractive bet.

Take the long view

If you want to bet that other investors will flood into sustainability-related stocks, Brookfield Renewable Partners LP (TSX:BEP.UN)(NYSE:BEP) should be at the top of your buy list.

With a market cap of $12.5 billion, Brookfield Renewable is already one of the largest pioneers in the space. It owns 19,000 megawatts of generating capacity from 5,274 facilities across North America, South America, Europe, and Asia. Its mission is to provide double-digit annual returns for shareholders by investing in renewable assets like hydro, wind, sold, and storage.

Thus far, the company has an enviable record. Since 2013, shares have rocketed higher by 135%, all while paying a steady dividend that now stands at 4.1%. Management thinks that the best days are yet to come.

“Our growth over the past twenty years has enabled us to establish ourselves as one of the largest renewable power investors and operators globally,” Brookfield’s CEO recently wrote. “This is backed by a multi-decade track record of generating strong returns across hydro, wind, solar and storage assets. Accordingly, we are very well positioned to participate in the decarbonization of global electricity grids that will occur over the next 25 to 50 years.”

There’s little more that you could ask of a long-term investment. Brookfield Renewable has a proven track record of success, an entrenched reputation as an active buyer of assets, and a growth runway that will last decades, if not a century. Collecting a 4.1% dividend along the way is just icing on the cake.

The 10 Best Stocks to Buy This Month

Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.

Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.

Click Here to Learn More Today!

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 Ryan Vanzo has no position in any stocks mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.