The Canadian stock market continues to be ripe with opportunities for renewable energy investors. The sector rebounded extremely well from the COVID-19 market crash in early 2020. However, it’s been a gradual decline for many top renewable energy stocks since early 2021.
After a disappointing past two years, it’s not difficult to find a discounted green energy stock on the TSX today. In addition to long track records of market-beating returns, many of those beaten-down energy stocks are also paying a top dividend yield right now.
Now is as good a time as any to be a renewable energy investor. With a long runway of growth potential, now would be an incredibly opportunistic time to be putting your cash to work. The sector is loaded with long-term demand, and there’s no shortage of top companies to choose from on the TSX.
Canadian investors looking to take advantage of the recent selloff should have this top company on their watch lists.
Brookfield Renewable Partners
As a current Brookfield Renewable Partners (TSX:BEP.UN) shareholder, I couldn’t resist taking advantage of the discounted prices in 2022. I added to my position several times last year and will likely be doing the same in 2023, especially if prices remain as low as they are today.
After bottoming out in March 2020, shares of Brookfield Renewable Partners went on to surge more than 100% through the remainder of the year. But after topping out in early 2021, the energy stock has found itself trading close to 40% below all-time highs after a disappointing past two years.
Despite the stock’s recent performance, though, shares are still up a market-beating 80% over the past five years. That’s not even including dividends, either. A gain of 80% since early 2018 is good enough for more than doubling the returns of the S&P/TSX Composite Index.
In addition to market-beating gains, this energy company pays a top dividend yield. At today’s stock price, the company’s dividend is yielding close to a whopping 5%.
There aren’t many companies on the TSX with a nearly 5% dividend yield that also have a market-beating track record like that of Brookfield Renewable Partners.
The only renewable energy stock you’ll ever need to own
A major reason why Brookfield Renewable Partners is the only renewable energy stock in my portfolio is because of the broad exposure the stock provides. The $25 billion company is a global leader in the space, with a wide-ranging portfolio of green energy assets to offer its global customer base.
Owning shares of this energy stock provides investors with instant diversification in the renewable energy sector. As a result, if you were to own only one green energy stock, there’s no question that Brookfield Renewable Partners would be my recommendation.
Foolish bottom line
In the short term, it’s very possible that we’ll see the renewable energy sector continue to slide. But over the long term, investors would be wise to own a few renewable energy stocks in their portfolios. Demand for clean energy is only expected to rise, making it an excellent long-term trend to hop on.
And even if we’re in for another year of losses, the passive income generated through dividends can generate can help keep your portfolio afloat in the short term.