If there’s one growth stock that’s beaten out the rest in the last month, it’s Brookfield Renewable Partners (TSX: BEP.UN). Shares of BEP stock have surged upwards after record earnings. The renewable energy asset company has seen its share rise by about 35% since earnings. Yet even more could be on the way.
What happened?
First, let’s go over why the growth stock saw such a surge. Despite reporting a net loss attributable to shareholders, the company’s funds from operations (FFO) increased by 8% compared to the prior year. This growth indicates the company’s ability to generate cash flow from its operations, which is crucial for investors.
Furthermore, the company made progress in advancing development activities and its expectation to bring on approximately 7,000 megawatts of new renewable capacity in the current year demonstrates its commitment to growth and expansion. Additionally, the progress in asset recycling activities, expected to generate significant proceeds, further strengthens investor confidence in the company’s ability to create value.
Then, of course, there was a landmark agreement with Microsoft. The announcement of a significant agreement with Microsoft to deliver over 10.5 gigawatts of additional renewable energy capacity is a major highlight. This agreement not only expands their longstanding partnership but also signifies the company’s ability to secure substantial contracts with leading global corporations. Such partnerships validate the company’s position as a key player in providing clean power solutions to support the growth of data centre operations, a sector with exponential demand for renewable energy.
Yet overall, the growth stock remained financially sound. BEP stock’s strong balance sheet with US$4.4 billion of available liquidity enables it to deploy significant capital into growth opportunities. The successful execution of almost US$6 billion in financings during the quarter underscores investor confidence in the company’s financial management and ability to access capital at favourable terms.
More to come
Here’s the thing: while current positive news is good, future growth is even better. And the growth stock had plenty of this. BEP stock aims to achieve over 10% in FFO per unit growth for the next year. So, it already plans on even more strong financial performance and growth.
Plus, as mentioned, BEP stock plans to bring on about 7,000 megawatts of new renewable capacity in 2024 alone. This demonstrates the company’s commitment to expanding its portfolio and indicates its optimism regarding future project development.
Additionally, the company is progressing asset-recycling activities that are expected to generate US$3 billion of proceeds (US$1.3 billion net to Brookfield Renewable) this year at attractive returns. This reflects the company’s strategy to optimize its portfolio and unlock value from mature assets.
As mentioned, the Microsoft deal and available liquidity all put it in in a strong position to start seeing more growth. Whether it’s through this new deal, or through acquisitions, the company has a lot of growth coming its way.
So, yes, shares are already up 35%, but more could certainly be on the way for BEP stock. As of writing, the company continues to receive a 5.2% dividend yield.
