Brookfield Renewable Partners (TSX: BEP.UN) remains one of the top Canada-based renewables stocks I think long-term investors should continue to look at right now.
For those with $1,200 (or $120,000, for that matter) to put to work in the renewable energy sector, I think being ultra-scrupulous around which stocks one picks to include in a given portfolio is important. That’s because there’s a wide performance range in this space, and companies like Brookfield Renewable with world-class assets stand out from the rest.
Here’s why I continue to pound the table on Brookfield Renewables and where I see the stock headed from here.
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Excellent earnings growth supports investment thesis
Trading at a valuation multiple of just seven times trailing earnings (and with a dividend yield of 5.2%), Brookfield Renewable is attractive on a value basis alone.
But looking at the company’s most recent earnings report, in which Brookfield Renewable brought in $907 million in revenue compared to analyst expectations of $835 million and earnings per share coming in right around forecasts at $0.35, there’s a lot to like about this company’s upside moving forward.
Adjusted for hydro conditions, the company’s funds from operations (or FFO, a free cash flow substitute metric) increased 15%, with the company’s FFO per unit growing at a double-digit pace for yet another quarter. So long as this momentum continues, there’s a lot to like about the company’s upside moving forward.
Diversification at a reasonable price
I tend to view Brookfield Renewable as a quasi-exchange-traded fund pick. Insofar as single stocks are concerned, this company is about as broadly diversified across its range of business lines as can be. With a range of hydro, wind, solar, and other storage and sustainability-focused solutions within its portfolio, Brookfield Renewable provides an investing platform for green energy investors to buy the entire space.
At the company’s current multiples, that’s an attractive proposition. And given the company’s long-term, contracted revenues and robust development pipeline, I think there’s plenty of growth potential ahead.
Over the long term, I see Brookfield Renewable as a winner. This is a company I’d certainly consider putting $1,200 to work in right now.
