In the global warming and climate change era, everyone understands the importance of adopting clean energy to fulfill their energy requirements. It is one of the key reasons why traditional energy companies are shifting towards producing renewable energy resources. Thus, investing in TSX renewable energy stocks is a great way to gain exposure to this space. And given Canada’s leading role in the world of energy, this is a space that could garner more interest in the years to come.
One such company to buy and hold is Brookfield Renewable Partners L.P. (TSX:BEP.UN), a global renewable power company. Let’s dive into why this company is one of the must-buy options in the renewable energy space.
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What the company does
Brookfield Renewable is an owner and operator of a range of clean energy assets located across the globe. The company’s portfolio consists of a number of solar, wind and hydroelectric facilities in North and South America, Europe and Asia. In addition, the company provides energy storage to these regions, while also boasting 21 gigawatts of installed capacity across its locations.
Strong financials lead the way higher
It’s been a rather bumpy road over the past five years, according to the company’s recent moves around the pandemic. That said, over the very long term, this is a growth stock that’s been moving up and doing the right.
The company’s surge has been tied to strong financial performance, which has continued. In the first quarter of 2024, Brookfield Renewable reported US$296 million in funds from operation, rising 8% year over year. Additionally, earnings per share came in at US$0.45, and the company’s cash on hand was reported at US$4.4 billion, enough to fund its capital outlays for the foreseeable future.
Importantly, Brookfield Renewable has used its strong earnings and cash flow growth to not only pay higher dividends to investors (with a yield of around 5.4% at the time of writing), but also to repurchase shares. Over the past 9 months alone, the company has repurchased more than 4 million shares. Accordingly, this is a stock many can view as both a dividend and growth play, with a touch of value.
Why buy Brookfield Renewable right now?
Brookfield Renewable is among the leading large-cap renewable energy plays in the market. The company’s business model is diversified across various clean energy types, meaning a slowdown in one pocket of the market shouldn’t impact this company the same way as other pure-play options in specific sectors.
The company’s recent performance highlights the strong value proposition Brookfield Renewable offers today. However, looking further down the road, it’s clear we’re going to need clean energy, and a lot of it. A number of top utility stocks are surging on this very thesis alone – that AI technology and the power it requires will reshape the pricing discussion around energy.
For those bullish on these trends, and who think renewable energy is the future, this is one of the top ways long-term investors can play this space.
