In the era of climate change and global warming, countries across the world are increasingly understanding the importance of adopting clean energy to meet their energy needs. This is one of the key factors that’s making many large traditional energy companies inclined towards renewable energy resources.
With an expected further surge in demand for renewable energy in the next couple of decades, share prices of such companies can witness a spectacular rally in the long run and potentially yield outstanding returns for their investors. That’s why investing in TSX renewable energy stocks could be a sensible investment idea right now, especially since they still look cheap based on their future growth potential.
In this article, I’ll talk about one such top renewable energy stock you can buy in Canada right now to hold for the next decade.
A top Canadian renewable energy stock to buy in July 2023
When you’re investing in new emerging market trends, you should avoid buying shares of small companies with weak financial bases to keep your risks low. This is because such small companies might be unable to withstand the competition from large global businesses with solid financial foundations.
Keeping that in mind, Brookfield Renewable Partners (TSX: BEP.UN) could be a trustworthy Canadian renewable energy stock to consider in July 2023. This Bermuda-headquartered company is listed on the Toronto Stock Exchange. It currently has a market cap of $11.3 billion, as its stock trades at $39.06 per share with around 15% year-to-date gains. At this market price, the stock also offers a decent 4.7% annualized dividend yield.
While North America continues to be Brookfield Renewable’s largest single market, with nearly 40% of its total 2022 revenue coming from the geographical segment, it’s also witnessing gradual revenue growth in other markets like Colombia, Brazil, and Asia.
Key reasons to invest in Brookfield Renewable stock
The first very important factor that makes Brookfield Renewable Partners stand out from most of its peers is its resilient balance sheet with a strong liquidity position. At the end of the March 2023 quarter, the company had nearly US$4 billion in available liquidity, which gives it the power to continue expanding its global presence.
To give you an example, in June 2023, Brookfield Renewable announced intentions to acquire an American fully integrated operator of renewable power assets, Duke Energy Renewables. This deal could not only contribute positively to Brookfield Renewable’s financial growth in the coming years but also strengthen its position further in the strategically important United States market by adding a large number of long-term renewable power assets to its portfolio.
In the last couple of years (2021 and 2022), Brookfield Renewable’s revenue rose 24%, reflecting its ability to continue growing at a fast pace, even in a challenging macroeconomic environment.
Although its strong top-line growth, expansion efforts, and this year’s broader market recovery have helped Brookfield Renewable stock trade positively in 2023, it still looks cheap after witnessing a 38% downside correction in the previous couple of years. Given that, long-term investors can consider buying this Canadian renewable energy stock at a bargain right now and hold.
