Valued at a market cap of US$16.3 billion, Brookfield Renewable (TSX: BEP.UN) is a TSX stock that went public in late 2000. Since its initial public offering, Brookfield Renewable stock has returned 476% to shareholders. However, if we adjust for dividend reinvestments, cumulative returns are closer to 3,240%.
Despite these outsized gains, the TSX dividend stock has trailed the broader markets in recent years and currently trades over 46% below its all-time highs. However, the ongoing pullback has increased its dividend yield to nearly 6%, making it an attractive option for income investors.
Let’s see why I’m bullish on this magnificent dividend stock right now.
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Is the TSX stock a good buy?
In Q1 2025, Brookfield Renewable Partners reported funds from operations (FFO) of US$315 million or US$0.48 per share, despite a challenging macro environment. Brookfield has demonstrated resilience amid evolving trade policy dynamics, positioning it to capitalize on surging global energy demand.
Adjusting for exceptionally strong hydro generation in the prior year, FFO per unit increased 15% year-over-year, while all-in results showed 7% growth. The performance reflects the strength of Brookfield’s diversified contracted global fleet, which is 90% contracted for approximately 14 years, with 70% of revenues indexed to inflation.
Management emphasized that recently announced tariffs pose minimal risk to the business due to proactive supply chain strategies and global diversification. The clean energy giant has secured equipment costs for projects currently under construction through fixed-price engineering and procurement contracts, while maintaining limited exposure to price increases through contractual protections and power purchase agreement (PPA) adjustment clauses.
Strategic initiatives gained momentum with US$4.6 billion in capital deployment, highlighted by the completion of Neoen’s privatization and an agreement to acquire National Grid Renewables. The Neoen acquisition provides Brookfield with eight gigawatts of operating and under-construction assets in Australia, positioning the company as the largest renewable operator in that market. Management plans to double Neoen’s development cadence from one gigawatt to two gigawatts annually while implementing asset rotation programs.
National Grid Renewables boasts 3.9 gigawatts of operating and under-construction assets, a 1-gigawatt construction-ready portfolio, and a 30-gigawatt development pipeline. The transaction mirrors the successful Duke Energy Renewables carve-out completed two years ago.
A focus on capital recycling
Capital recycling activities accelerated with asset sales, generating strong returns. Brookfield closed sales of First Hydro and Phase 1 of its India portfolio, achieving nearly three times the invested capital and 20% investment returns. An additional 25% stake sale in Shepherds Flat generated approximately two times the invested capital.
The Microsoft renewable energy framework agreement continues expanding beyond the initial 10.5 gigawatts, with management expressing confidence in securing similar arrangements with other corporate counterparties in 2025. Strong demand fundamentals driven by digitalization and reindustrialization support the company’s growth outlook despite market volatility.
Brookfield Renewable’s global platform, with an operating capacity approaching 45,000 megawatts, provides geographic and technological diversification that management believes positions the company advantageously amid supply chain disruptions and evolving trade policies.
Brookfield Renewable’s growing cash flows and capital recycling initiatives should enable it to reinvest in growth projects and further increase dividends. Analysts expect the company to increase its dividends from US$1.42 per share in 2024 to US$1.71 per share in 2029.
Given consensus price targets, analysts expect the TSX dividend stock to gain 16% over the next 12 months. After adjusting for dividends, cumulative returns could be over 22%.
