If investors are looking for growth over the next few years, few companies offer the opportunity that Brookfield Renewable Partners LP (TSX: BEP.UN) does right now. Brookfield Renewable stock recently surged in share price after a record quarter. Shares have jumped since the end of April, up a whopping 35% between April 30 and May 10.
Yet there are more reasons than this current growth to consider Brookfield Renewable stock. So let’s get right into it.
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The finances
First there’s the recent earnings report, with Brookfield Renewable reporting record earnings during its first quarter. Despite a net loss attributable to unitholders for the quarter, Brookfield Renewable reported Funds From Operations (FFO) of US$296 million.
This marked an 8% increase compared to the prior year. This growth reflects solid resources across its hydro fleet, and the impact from development and growth initiatives. Such robust financial performance demonstrates the resilience and profitability of its renewable energy assets.
Furthermore, with US$4.4 billion of available liquidity and a strong balance sheet, Brookfield Renewable has the financial flexibility to deploy significant capital into growth initiatives. The company has been actively strengthening its balance sheet through strategic financings and repurchasing its units, demonstrating its commitment to enhancing shareholder value.
More partnerships
Brookfield Renewable already made one strong choice last year by partnering with Cameco (TSX: CCO) for Westinghouse Electric. This alone would bring in significant revenue.
However, Brookfield Renewable has forged more strategic partnerships with leading global corporations like Microsoft (NASDAQ: MSFT). This demonstrates its ability to deliver scale to clean power solutions to meet the growing demand for renewable energy. The landmark agreement with Microsoft to deliver over 10.5 gigawatts of additional renewable energy capacity signifies the company’s capacity to cater to the needs of tech giants driving the digitalization and cloud computing trends.
Leading power provider
As the demand for clean energy escalates, Brookfield Renewable is positioned as a leading provider of clean power, particularly to the digitalizing global economy. Its diverse portfolio of renewable energy assets, including hydro, wind, solar, and distributed energy, enables it to offer tailored solutions to meet the evolving needs of its customers, resulting in favourable contracting opportunities.
We’ve already seen this through partnerships like those with Microsoft and Cameco. And it’s likely to climb even higher given its exposure as a top renewable energy operator.
Growth to come
The company continues to progress development activities and expects to bring on approximately 7,000 megawatts of new renewable capacity this year. Additionally, asset recycling activities are expected to generate US$3 billion of proceeds, enhancing its financial position and creating opportunities for further growth and value creation.
This has also supported the company’s dividend growth. Brookfield Renewable stock targets a sustainable distribution with annual increases averaging between 5% to 9%. This commitment to providing consistent and growing distributions enhances the attractiveness of the investment for income-focused investors.
Valuable dividend stock
Right now, shares may have climbed by 35%. However, Brookfield Renewable stock still provides a valuable opportunity. Shares offer a dividend yield at 5.15% as of writing. Furthermore, BEP.UN trades at a valuable 1.8 times book value as of writing. So with shares still down 13% in the last year and climbing higher, and more growth on the way, Brookfield Renewable stock is a solid buy on the TSX today.
