Is This Energy Stock the Most Valuable on the Market?

Energy stocks used to be a sure thing, but it’s not that way any more. What should investors do when it comes to finding long-term returns?

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It’s been a hard time to find valuable energy stocks. And, honestly, that’s an enormous change for Motley Fool investors. It used to be that you could look practically anywhere, in any energy sector, and find long-term holds that could bring in both returns and dividends.

What changed?

What changed was the entire world! More and more investment has been going into clean energy stocks, trying to find the best way to create clean power. Furthermore, oil and gas is becoming not only harder to find, but the recent crisis in Ukraine has led to sanctions against Russia. This has put pressure on European companies to find a way to become self-reliant. That means clean energy.

But the biggest question is, which clean energy stocks will come out on top? There are so many options out there, from wind and solar to hydro and nuclear. And that puts a lot of pressure on investors wanting to get in on potentially the biggest growth sector of the next few decades, at least.

Which area to choose?

In the next few years, nuclear power looks like it will come on top. But mining for uranium also poses problems in the future. Hydro, solar, and wind also pose solid options, but it’s unclear which could be the best generator to power up battery storage.

Instead of choosing one, it might be good to put your foot in just about everything! Furthermore, I wouldn’t want to miss out on any locations. Every country will need to create their own power. That means there is an entire world filled with opportunity for growth.

This is why I would look for a company that has access to it all.

Best value on the TSX today

That’s why today I would consider Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP) one of the most valuable stocks on the TSX today. The renewable power-generating company has facilities throughout the world, from North and South America into Europe, India, and China. It generates energy from practically every type of renewable energy source, creating a diversified portfolio for investors.

Of course, it’s not without its problems. The energy stock missed earnings estimates for the last several quarters. This comes down to rising costs, mounting acquisitions, and supply-chain issues. However, the first quarter demonstrated that the company is now well within value territory — especially for long-term investors.

The company’s growth continues to rise, one analyst said, and its cash flows from a diverse range of power products should bring with it premium valuation. In fact, analysts now believe the stock will outperform long term and should manage near-term sector headwinds.

Bottom line

Shares of Brookfield stock fell from peak pricing in January 2021 by 35% a year later. Shares then made a climb back up by 15% in March 2022, before falling once more by the 16%. Yet in the last week or so, with a correction under way, shares have been steadily climbing upwards. Shares are now up 6% since May 16.

With analysts giving the company a potential target price of 11% in the near term, this company still has some solid growth head — plus, a dividend yield you can lock in at 3.6% as of writing. But with more growth steadily on the way, this is a great time to buy up the stock for long-term growth in energy stocks.

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

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