Right now, the TSX today is down and could fall further. While economists are divided on whether there is going to be a recession or not, that disagreement means it could be quite mild. Therefore, it’s now a great time to start up with your growth stock watchlist.
And, in my opinion, there is really just one growth stock out there that holds the biggest opportunity for 2023 and beyond.
Renewable energy stocks
It was a bad year for renewable energy stocks. Shares of these companies fell drastically after peaking when U.S. president Joe Biden came to office. It was also a disappointment for investors wanting to seek out renewable energy and have a more eco-friendly portfolio.
However, that’s likely to soon turn around. While oil and gas prices may be up right now, the future is where the money is flowing. Right now, government cash is flowing into renewable energy companies to build infrastructure and fuel the future.
The problem is some of these renewable energy stocks are still overvalued. The enthusiasm filled these stocks again and again, which is lovely, but since 2021, many continue to be overvalued — even after a collapse sent them downwards.
Meanwhile, it costs a lot of cash to build the future. Wind farms and solar farms cost money, and we’re going to need a lot of it if the world is going to shift to renewable energy. So, when it comes to investing in a growth stock in this sector, you need one with a lot of cash on hand.
Brookfield Renewable stock
Brookfield Renewable Partners (TSX: BEP.UN) continues to be one of the largest publicly traded renewable energy companies. Just because it’s focused here though doesn’t mean it’s not diversified. It holds assets across Europe, Asia, and North and South America in everything from hydroelectricity to nuclear power.
What’s more, the stock remains quite cheap, even after hitting oversold territory in the last few months. And it’s doing well, with 2022 seeing a raise in the growth stock’s dividend by 5.5%. As of writing, that dividend yield sits at 4.49%. Meanwhile, shares are down 12% in the last year, though they’ve rebounded 13% year to date.
Easing concerns lead to more growth
There is more growth coming for the growth stock as well. Right now, rising inflation and supply-chain disruptions hurt the stock. However, these are already easing and should continue to do so throughout 2023.
Now, those lessening concerns could lead to an increase in growth for the sector and Brookfield stock as well. In fact, it could lead to even more government funding to speed up the process.
For now, Brookfield stock trades down from all-time highs — highs that are likely to come again. That would provide a potential upside of 71% as of writing. Furthermore, it’s enjoyed growth of 147% in the last decade — growth that is likely to occur once more for investors, even through the rest of 2023.
