Any returns earned in the TFSA (Tax-Free Savings Account) as capital gains, interests, and dividends are exempt from Canada Revenue Agency taxes. So, the tax-sheltered benefits associated with the TFSA make the registered account ideal for holding blue-chip dividend stocks.
In 2025, the TFSA contribution room increased to $7,000, bringing the cumulative contribution room to $102,000. So, let’s see how TFSA investors can allocate $15,000 in this TSX dividend stock to create more than $5,000 in annual passive income.
The bull case of investing in Brookfield Renewable stock
Brookfield Renewable Partners (TSX:BEP.UN) is among the largest clean energy companies in the world. While the broader markets are trading near all-time highs, the TSX stock trades 50% below record levels, allowing you to buy the dip and benefit from a tasty dividend yield of 6.7%.
Despite a challenging macro environment in 2024, Brookfield Renewable reported record funds from operations (FFO) of US$1.21 billion or US$1.83 per share, an increase of 10% year over year. Notably, the FFO in the fourth quarter (Q4) rose by 21% year over year.
In 2024, Brookfield Renewable commissioned 7,000 megawatts of new renewable energy capacity, which is enough to power over five million homes. It remains on track to achieve an ambitious target of reaching a 10,000-megawatt annual development run rate by 2027, showcasing a commitment to scaling its clean energy infrastructure in several markets.
Brookfield invested close to US$2 billion across various growth initiatives in 2024. Some notable transactions included investments in Infinium, Ørsted, and Neoen, further diversifying its renewable energy portfolio.
Moreover, the company successfully executed its capital-recycling strategy, reaching agreements to sell assets worth US$2.8 billion (over US$1 billion net to Brookfield Renewable) at an internal rate of 25% IRR and a 2.5 times multiple on invested capital.
A major highlight of 2024 was the renewable energy framework agreement with Microsoft, where Brookfield will deliver an additional 19,000 gigawatt-hours of annual generation.
Brookfield chief executive officer Connor Teskey emphasized the company’s strong market position, stating, “The outlook for clean power is stronger than ever, with accelerating demand driven by corporate customers on the back of accelerating data center development and broader electrification.”
A strong performance across business segments
In Q4 of 2024, Brookfield’s hydroelectric segment generated US$511 million in FFO, while the wind and solar segments contributed US$833 million in FFO, a 30% increase year over year. The distributed energy, storage, and sustainable solutions segments also showed remarkable growth, generating US$329 million in FFO, up 78% year over year.
Brookfield Renewable ended 2024 with US$4.3 billion in available liquidity, allowing it to capitalize on the growing demand for renewable energy. Moreover, its development pipeline is 200,000 megawatts, providing significant growth potential in 2025 and beyond.
Brookfield has also secured its supply chain through framework agreements with global and U.S.-based OEMs (original equipment manufacturers), which should help it maintain development timelines and return targets.
Brookfield Renewable announced a 5% increase in annual distribution to US$1.492 per unit, marking its 14th consecutive year of distribution growth. Despite the ongoing pullback, BEP stock has returned 180% to shareholders in the past decade after adjusting for dividend reinvestments.
The Foolish takeaway
| COMPANY | NUMBER OF SHARES | DIVIDEND | CAPITAL GAINS (EST.) | TOTAL PAYOUT | DIVIDEND FREQUENCY |
| Brookfield Renewable | 677 | $0.373 | $4,950 | $5,960 | QUARTERLY |
An investment of $15,000 in the TSX stock will help you buy 677 company shares and earn $1,010 in annual dividends. Moreover, the dividend stock trades at a 33% discount to consensus price target estimates, which means you could earn roughly $4,950 via capital gains, taking your potential cumulative gains to $5,960 over the next 12 months.
