Bet on Clean Energy With This Top TSX Stock Right Now

In the clean energy sector, Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP) doesn’t get the love it deserves among investors right now.

| More on:
Solar panels and windmills

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

The range of growth sectors investors are focusing on right now is widening. At one time, growth investors focused almost entirely on technology and innovation as the key growth drivers of choice. Today, other high-profile sectors have emerged as ones investors should consider.

Clean energy plays have been one such area of focus. Indeed, the demand for clean energy is skyrocketing and expected to do so for a very long time. Producers of clean energy are thus likely to be blessed with positive macroeconomic conditions, relative to the fossil fuels-dominated energy sector today.

One top pick of mine in this space is Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP). Here’s why Brookfield Renewables ought to be on investors’ watch lists right now.

Best-in-class clean energy play

I’m not the only one who thinks Brookfield Renewables is a place to invest. Indeed, analysts are growing increasingly bullish on this Canadian clean energy play.

Credit Suisse analyst Andrew Kuske calls Brookfield Renewable a “best-in-class developer of long-dated renewable power.” He added that Brookfield’s business model as well as the company’s positioning as an “active capital recycler and a savvy purchaser of distressed assets” make this a great pick.

I wholeheartedly agree.

Brookfield Renewables’s stock price has really underperformed since the beginning of the year. Indeed, investors seem to be dissuaded by this growth sector, focusing on other high-growth areas of the market right now.

However, the company’s current discount of more than 25% from its 52-week high provides an excellent opportunity to pick up shares of this best-in-class renewable energy play. I think the company’s positioning in the market remains rock solid. Brookfield Renewables’s flexible funding strategy, global presence, and hydroelectric power focus are three of the reasons I like this renewables play relative to its peers.

Additionally, I think Brookfield’s potential to grow via acquisitions is noteworthy. Given the deep pockets of the company’s parent, I foresee some intriguing opportunities on the M&A front. Whether these ultimately materialize remain to be seen. However, the growth potential with this stock shouldn’t be ignored by investors.

Bottom line

Brookfield is a big player in the renewable energy space. The company’s total power generation capacity of 20,000 megawatts is impressive. I think the company’s total capacity will only grow in time. As sector-specific unit economics improve, Brookfield Renewables is well positioned to ride this wave toward impressive cash flow growth over time.

Accordingly, those seeking a great growth stock trading at a meaningful discount to all-time highs may want to consider Brookfield Renewables. After all, it may not be this cheap forever.

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.

The Motley Fool has no position in any of the stocks mentioned. Fool contributor Chris MacDonald has no position in any stocks mentioned in this article. 

More on Dividend Stocks

edit Balloon shaped as a heart
Dividend Stocks

Dividend Lovers: 3 U.S. Stocks You Haven’t Heard About

Don't just stick to Canadian companies for a great dividend, consider these U.S. stocks you probably haven't even heard of.

Read more »

money cash dividends
Dividend Stocks

How to Invest $10,000 Over the Next 5 Years

Those looking to put $10,000 to work in this rather uncertain and volatile market may want to consider these three…

Read more »

TFSA and coins
Dividend Stocks

TFSA Investors: 2 Incredible Deals to Buy in August

Here are two TSX stocks investors can consider for their TFSA contribution this year.

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Dividend Stocks

These 3 TSX Stocks Have Doubled Over 3 Years: Can They Do It Again?

Three TSX stocks whose share prices have doubled in three years are well-positioned to repeat history and reward investors with…

Read more »

data analytics, chart and graph icons with female hands typing on laptop in background
Dividend Stocks

Smart Buys: 2 Low-Profile Value Stocks With Strong Upside

Two low-profile value stocks with strong upside are smart buys if you’re looking for investments outside the energy sector.

Read more »

Dividend Stocks

TFSA Growth: 3 Safe Dividend Stocks to Turn $30K Into $2.5 Million by Retirement

Here’s how Motley Fool investors can use their TFSA to create wealth for retirement, all from safe TSX dividend stocks.

Read more »

A plant grows from coins.
Dividend Stocks

2 TSX Stocks That Could Grow Your Portfolio Over the Next Decade

These two TSX stocks have a strong history of growth and increasing dividends.

Read more »

Dividend Stocks

3 TSX Stocks With High Dividend Yields

Are you interested in buying dividend stocks? Here are three TSX stocks with high dividend yields!

Read more »