Brookfield Renewable Partners (TSX:BEP.UN) is one of the top publicly traded renewable power stocks in the world. Recently, this company has been making headlines due to several developments, specifically its Green Financing framework and its share price movements.
Over the past year, Brookfield Renewable’s stock price has been volatile, to put it nicely. While this stock has rebounded off of last year’s lows, there’s a lot of ground to make up for the company in order for it to breach its 2021 all-time highs. Accordingly, some concern may be felt among investors who believe the renewable energy story is now out of fashion.
With that said, let’s dive into whether Brookfield Renewable is worth considering at current discounted levels.
A business model built for the long term
Brookfield Renewable is a unique company in that its structure allows for some rather deep pockets to invest in its core renewable power projects. A subsidiary of Brookfield Asset Management, Brookfield Renewable has one of the best management teams in the industry, which has led to outsized investor interest.
Renewable power generation is becoming a much bigger issue from both a government and corporate standpoint. With its own solar, hydroelectric and wind power generation facilities around the world, Brookfield Renewable looks to be a leader in this high-growth sector. Other storage and distribution services complement the company’s core business and provide sustainable cash flow growth potential over the long term.
Green Financing framework becoming a key focal point
Recently, Brookfield Renewable released an update of its Green Financing framework in order to incorporate investment categories that are aligned with the company’s strategy. Focusing on projects and businesses looking to transition to zero emissions, Brookfield aims to become a leader in this high-growth industry.
The newly updated frameworks define parameters as per the current Green Loan Principles (2023) and Green Bond Principles (2021) to provide third-party assurance independently and also offer impact reporting and improve allocation. Moreover, the company has taken a big step toward getting into the low-carbon energy segment. To do this, Brookfield has made substantial investments in emerging renewable power-generation technologies.
The company is expected to benefit from the growth of green hydrogen-based companies, which utilize green energy to power its hydrogen projects. Brookfield Renewables engaged in a number of partnerships in the hydrogen and energy infrastructure sector to further this mission. These projects will be aimed at North America to start, but given the company’s global footprint, there’s plenty of growth potential elsewhere.
Bottom line
Brookfield Renewables provides investors with exposure to a diverse portfolio of renewable power. For those who believe solar, wind, hydroelectric, hydrogen, and other power sources will become critical in our future economy, this is a stock to consider.
