If you want to earn solid returns from your stock investments, you must focus on companies that consistently generate cash flow, reward shareholders with attractive dividends, and offer stability, especially in uncertain markets. One of the best ways to achieve this goal is through fundamentally strong dividend stocks, which provide reliable income and long-term growth potential.
Right now, there’s a top-notch TSX dividend stock, Brookfield Renewable Partners (TSX: BEP.UN), that offers an attractive 6.6% yield, making it a great choice for income-focused investors. In this article, let’s explore why this dividend powerhouse deserves a bulk buy right now, how it maintains its strong payout, and why it could be a core holding in your portfolio for years to come.
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Brookfield Renewable stock
If you don’t know it already, Brookfield Renewable is a global renewable energy giant that generates revenue mainly from its vast portfolio of clean energy assets. The company operates hydroelectric, wind, solar, and storage facilities across the globe, with an installed capacity of 46,000 megawatts.
Currently, Brookfield Renewable stock trades at $29.90 per share, with a market cap of $8.6 billion. It has dropped nearly 17% in the last three months. While this decline might look concerning to some investors, it has also created an opportunity. With its share price down, Brookfield Renewable’s dividend yield has now surged to an attractive 6.6%, making it an appealing dividend stock for income-focused investors looking for reliable payouts.
Strong 2024 financial performance
Despite the recent dip in its share price, Brookfield Renewable is continuing to deliver record-breaking financial results. In 2024, its funds from operations (FFO) grew by 10% year over year to US$1.2 billion. In the fourth quarter alone, it saw a 21% per unit YoY increase in FFO, reflecting the underlying strength of its business model.
The company commissioned about 7,000 megawatts of new renewable energy capacity in 2024, bringing it closer to achieving its goal of 10,000 megawatt-per-year run rate by 2027. Also, Brookfield Renewable continued its strategy of asset recycling, generating US$2.8 billion from selling select assets at 25% internal rates of return. This strategy is not only unlocking the value of its assets but also providing capital to fund its future growth projects.
What brightens its long-term growth prospects
Interestingly, Brookfield Renewable recently secured contracts to deliver an additional 19,000 gigawatt-hours per year of clean energy, including a landmark agreement with Microsoft amid rising corporate demand for sustainable energy solutions.
Last year, the company deployed or committed US$12.5 billion into new investments. Some of its recent acquisitions include stakes in Orsted’s offshore wind portfolio, Infinium’s eFuels platform, and French renewables giant Neoen. These strategic moves could further diversify its renewable energy portfolio and accelerate its financial growth trends in the years to come.
Moreover, the clean energy sector is already witnessing solid demand growth, with corporate electrification efforts and artificial intelligence-driven data center expansions. And these sustainable trends could help Brookfield Renewable continue its long-term growth trajectory.
