Canadians sitting on cash these days aren’t doing themselves any favours — especially if that cash is for investing. While it can be nerve-wracking to invest in a lower-performing market, this also means you’re missing out on opportunities.
By doing a little digging, investors can find some strong TSX stocks that can provide you with income now and returns in the future. So, let’s look at one sector I’d consider and a dividend stock to match it.
Renewable energy
The renewable energy sector is an attractive option for long-term investors due to several compelling reasons. The world is transitioning from fossil fuels to renewable energy sources to combat climate change. According to the International Energy Agency (IEA), renewable energy is expected to account for almost 95% of the increase in global power capacity through 2026, with solar PV alone providing more than half of this increase.
Governments worldwide are implementing policies and incentives to support renewable energy development. For example, the European Union aims to achieve climate neutrality by 2050 with significant investments in renewable energy projects. Similarly, the United States government has introduced tax credits and subsidies for renewable energy initiatives.
Furthermore, technological advancements have significantly reduced the costs of renewable energy technologies. The cost of solar photovoltaics (PV) and wind power has decreased dramatically over the past decade. The IEA reports that the cost of utility-scale solar PV has dropped by 82% since 2010.
Finally, global investment in renewable energy reached US$303.5 billion in 2020, representing a 2% increase compared to the previous year. This trend is expected to continue as more countries commit to clean energy goals.
Buy BEP
With so much growth in the future, there is one dividend stock I would buy above the rest. That’s Brookfield Renewable Partners (TSX:BEP.UN). BEP stock has significantly expanded its renewable energy portfolio through strategic acquisitions and organic growth. Notable acquisitions include hydroelectric, wind, and solar projects, which have contributed to its growing capacity and revenue.
Furthermore, BEP stock entered a significant deal with Microsoft to deliver over 10.5 gigawatts of new renewable power capacity globally. This partnership underscores Brookfield’s capability to scale and meet the rising demand for renewable energy, benefiting from Microsoft’s extensive reach and influence in the tech industry.
Another partnership with Cameco involves advancing the development of nuclear power, which is critical for a balanced clean energy portfolio. This diversification into nuclear energy can provide a stable revenue stream and bolster Brookfield’s position in the renewable energy market.
On top of this, BEP stock reported record first-quarter results in 2024, reflecting strong operational performance and growth. The company announced a 5% increase in distributions, highlighting its robust cash flow and commitment to returning value to shareholders.
Bottom line
BEP stock’s strategic partnerships, like those with Microsoft and Cameco, position it well for future growth. These deals not only expand its capacity but also integrate cutting-edge technology and new energy sources, enhancing its competitive edge.
It’s now an excellent buy for investors due to its strong growth potential, financial stability, diversified portfolio, and commitment to sustainability. The company’s strategic partnerships with Microsoft and Cameco, coupled with its impressive earnings and dividend history, further enhance its attractiveness as a long-term investment.
