This 6% Dividend Stock Is My Pick for Instant Income

This top dividend stock is offering up income but also huge returns in the near future as the world keeps going green.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Brookfield Renewable Partners (TSX:BEP.UN) on the TSX is often seen as a solid long-term investment, especially for those looking to dive into the renewable energy sector. And this is gaining momentum globally. With a diverse portfolio of hydroelectric, wind, and solar power assets, the company is well-positioned to benefit from the ongoing shift toward sustainable energy solutions.

However, it has faced some struggles recently. These include fluctuations in energy prices and regulatory challenges that have affected its profitability. Additionally, like many stocks in the energy sector, it can be sensitive to market volatility and interest rate changes. Despite these bumps in the road, Brookfield Renewable is committed to expanding its renewable footprint. Plus, the focus on sustainability makes it a compelling option for investors, especially those looking for a green investment with the potential for steady growth in the future!

Created with Highcharts 11.4.3Brookfield Renewable Partners PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Recent moves

Recently, the company reported some solid financial results, showcasing its resilience amid a challenging energy market. With a focus on expanding its renewable energy portfolio, Brookfield has continued to invest in new projects and technologies. This bodes well for long-term growth. However, despite the positive strides, the stock has faced some pressure due to fluctuations in energy prices and rising interest rates. This can impact the company’s overall profitability. Investors are keeping a close eye on how these external factors may influence future performance.

On the flip side, Brookfield Renewable is actively working on enhancing its operational efficiency and exploring new opportunities within the renewable energy sector. The company’s strategic initiatives to increase its hydroelectric and solar power assets are aimed at bolstering its position in the market. Plus, Brookfield’s commitment to sustainability and addressing climate change resonates well with environmentally conscious investors. This adds a layer of appeal to the stock. While recent challenges have caused some volatility, the long-term outlook for BEP.UN remains promising as the world continues to shift toward cleaner energy solutions.

Into earnings

During earnings, the company reported a strong second quarter, generating $339 million in funds from operations (FFO), a 9% increase from the previous year. This growth was driven by strategic investments and a diverse portfolio that includes hydro, wind, and solar energy projects. The strong performance in their renewable segments, particularly in North America and Europe, reflects the ongoing demand for clean energy solutions. Moreover, Brookfield’s robust liquidity position, with $4.4 billion available for investment, positions it well to capitalize on attractive growth opportunities as they arise. This allows the company to pursue new projects while maintaining operational flexibility.

Furthermore, the company’s proactive approach to growth is evident in its ambitious plans for expanding its development pipeline. This now stands at an impressive 200,000 megawatts. The potential to commission approximately 7,000 megawatts of new capacity this year alone is a significant boost to future revenue streams. Notably, Brookfield’s commitment to sustainability, coupled with its targeted distribution increases of 5% to 9% annually, underscores its focus on delivering value to shareholders. Despite recent market fluctuations, the combination of strong operational performance, strategic growth initiatives, and a healthy balance sheet makes Brookfield Renewable a compelling option for long-term investors looking to benefit from the global shift toward renewable energy.

Value on value

Brookfield’s market cap of $9.28 billion and enterprise value of $48.21 billion suggest that the market views the company as a significant player in its industry. That’s despite a trailing price-to-earnings (P/E) ratio that isn’t applicable due to net losses. The price-to-sales ratio of 1.28 indicates that the stock is relatively affordable based on its revenue. Meanwhile, the enterprise value-to-revenue ratio of 6.46 suggests that investors are paying a premium for future growth. However, with a current ratio of 0.52 and total debt standing at $30.16 billion, it’s crucial for investors to be aware of the company’s leverage and liquidity position, as it can impact its financial stability.

Furthermore, while the stock is down 8% in the last year at writing, it’s essential to consider the potential for recovery and growth, especially given the company’s quarterly revenue growth of 23%. The forward annual dividend yield of 6.02% indicates a commitment to returning value to shareholders, even amidst financial challenges. Overall, Brookfield stock looks undervalued at these levels, especially given its future outlook.

Should you invest $1,000 in Brookfield Renewable Partners right now?

Before you buy stock in Brookfield Renewable Partners, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Brookfield Renewable Partners wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Renewable Partners. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

Confused person shrugging
Dividend Stocks

Where to Invest $2,500 in the TSX Today

These TSX stocks offer attractive dividends and a shot at decent upside on a rebound.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Invest $25,000 in These Dividend Stocks for $1,956.66 in Annual Passive Income

Dividends stocks can make a huge difference, even if shares don't move an inch. And these might be the best.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Got $5,000? 5 Income Stocks to Buy and Hold Forever

These income stocks have a solid dividend-payout history that can help you earn stress-free passive income.

Read more »

grow money, wealth build
Dividend Stocks

Why I’d Invest $10,000 in This Undervalued Dividend-Growth Stock for Decades of Income

This undervalued dividend stock offers a high yield of over 8% and can help you earn more than $200 in…

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Here’s Exactly How a $20,000 TFSA Could Potentially Grow to $200,000

Index funds like the iShares S&P/TSX Capped Composite Index (TSX:XIC) are tax free in a TFSA.

Read more »

Dividend Stocks

How I’d Invest $6,000 in Canadian Real Estate Stocks to Build Lasting Wealth

Canadian REITs on sale! See how grocery-anchored retail properties offering 9% yields could turn $6,000 into lasting wealth despite US…

Read more »

rain rolls off a protective umbrella in a rainstorm
Dividend Stocks

Economic Headwinds: Should You Still Consider Buying the Dip?

A market dip might seem like a bumpy road, but it can be far smoother in the future with the…

Read more »

e-commerce shopping getting a package
Dividend Stocks

Consumer Spending Plays Amidst the Current Market Dip

Consumption may go down in market dips, but certain consumer stocks are certainly better off than others.

Read more »