Renewable energy is one of the best opportunities for future investors. Think of it this way. We’ve been through strong investments in coal, oil, and gas, and now it’s renewable energy’s turn.
So, let’s not only look at why renewable energy could be a strong Canadian investment, but also at one renewable stock that belongs on your watchlist.
Why renewable works
Canada is one of the best-positioned countries in the world when it comes to powering renewable energy sources. Hydropower already supplies about 60% of the country’s electricity; in fact, there’s enormous potential when it comes to wind, solar, and even tidal energy. The strong resource base also means Canadian companies can provide power not just to Canada, but also develop technologies to export. And that leaves Canadian investors with strong opportunities to back those firms exporting that tech.
And Ottawa? It’s backing this 100%. The federal and provincial governments have committed to net-zero targets, driving billions of dollars in funding, taxes, and regulatory changes to accelerate a shift from fossil fuels and fund growth for renewable projects with predictable long-term revenue streams. Again, sounds like a great investment opportunity waiting to happen.
The transition isn’t just underway; it’s expanding, and not only in Canada. The United States, the European Union, and other countries are pouring money into renewables and carbon reduction. Canadian companies can now simply plug into the demand. Therefore, now is the time to get in on a stable income that can last a lifetime, especially with a stock like Brookfield Renewable Partners (TSX:BEP.UN).
Why BEP?
When it comes to long-term opportunities in renewable energy, BEP belongs front and centre. The renewable energy stock isn’t just another solar stock or something; it’s expanding with some of the largest companies in the world. And recent earnings demonstrate just how powerful these projects have been.
During its second quarter, revenue jumped over 14% year over year, with funds from operations (FFO) rising 10% to $371 million. Despite a net loss on paper, the core business of generating and selling renewable power remains strong and is only getting stronger. That’s especially from deals made with companies such as Hydro FrameWork with Alphabet for up to 3,000 megawatts of hydro capacity in the United States. Now, BEP is positioning itself as the go-to partner when companies want to scale out with clean power.
So, not only does this mean growth, it means long-term recurring income. The balance sheet shows that the income story, with BEP ending the quarter with $4.7 billion in liquidity. This came through selling mature projects, reinvesting in new opportunities, and growing even further without overextending itself. And a nice bonus? The energy stock holds a 6% dividend yield at writing, targeting 5% to 9% in annual growth payouts.
Bottom line
While BEP stock isn’t immune to risks, it certainly has rewards in its favour. It remains one of the clearest ways for Canadian investors to get exposed to renewable energy. The scale, diversification both in location and type of renewable energy, along with large-scale partnerships, make it a top-notch stock to consider on the TSX today.
