1 Canadian Stock I’d Seriously Consider If I Had $7,000 in TFSA Room

If I had just $7,000 in TFSA room to invest, I’d seriously consider Brookfield Renewable Partners (TSX:BEPC)(TSX:BEP.UN) stock.

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Key Points
  • This year, Canadians got $7,000 worth of new TFSA contribution room.
  • That's $7,000 worth of potential new investments, if you're willing to contribute the full $7,000.
  • In this article I share one investment that might be worth considering for a small $7,000 starter TFSA.

This year, Canadian investors got an extra $7,000 worth of Tax-Free Savings Account (TFSA) contribution room. If you’re new to TFSA investing, that may be all the cash you’ve got to invest in a TFSA. Where should you get started investing with $7,000? In this article, I’ll share one idea.

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Brookfield Renewable Partners

Brookfield Renewable Partners (TSX: BEPC)(TSX: BEP.UN) is a Canadian renewable energy company/partnership. It is well known for supplying massive amounts of power to utilities and to U.S. tech giants.

Brookfield Renewable’s main claim to fame lately is its headline-grabbing activities in the United States. In 2024, the company agreed to supply Microsoft with 10 gigawatts of renewable power. In 2025, it inked a similar deal with Alphabet for three gigawatts. Later, it began exploring an $80 billion deal involving U.S. nuclear plants (this deal appears not finalized yet). The two major supply deals will provide billions in revenue for Brookfield Renewable, and the nuclear deal could supply even more if it closes. The three together provide hope for Brookfield Renewable’s growth and compounding well into the future.

I should clarify one thing: when I say that I “would seriously consider” Brookfield Renewable stock, I don’t mean that I have zero exposure to the stock now. I actually do own some directly, through a position in Brookfield Corp, one of the largest positions in my portfolio. Brookfield Corp owns 52% of Brookfield Renewable Corp, giving it (and me) substantial exposure to Brookfield Renewable.

There is certainly one difference between a direct Brookfield Renewable shareholder and me: I don’t collect the dividend in my brokerage account, nor do I enjoy the optionality of re-investing the dividend as I see fit. In the next section, I’ll explore why that optionality could be a major selling point for a certain type of investor.

The value of Brookfield Renewable’s dividend

One reason why you might want to own Brookfield Renewable directly, instead of through Brookfield Corp, is that owning the common stock lets you collect the dividend. If you own Brookfield Corp, the Brookfield Renewable dividends flow through to the company and are mostly, if not entirely, invested on your behalf by Brookfield management.

Why would you want to actually collect the dividend?

One reason is that the income could be fairly substantial. Brookfield’s dividend yield is currently 3.74%. That’s far above average for the TSX. With a $7,000 TFSA invested at a 3.74% yield, you’d get back about $257.40 in passive income each year. That’s not a bad start for a portfolio worth just $7,000!

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCY
Brookfield Renewable Partners$42.47165$0.39 per quarter ($1.56 per year)$64.35 per quarter ($257.40 per year)Quarterly

A second, more important consideration is this: with dividends, you have some optionality in how you reinvest your profits. Do you feel like investing a bit from the renewable energy pile into the tech pile, the banking pile, or the precious metals pile? Brookfield Corp won’t necessarily always allocate capital where you want it to be allocated. By getting dividends from Brookfield Renewable Corp directly, you gain the ability to decide where your profits are reinvested. If you have strong feelings on the matter, then the dividend may be worth it.

Fool contributor Andrew Button has positions in Brookfield. The Motley Fool has positions in and recommends Brookfield. The Motley Fool recommends Alphabet, Brookfield Corporation, Brookfield Renewable, Brookfield Renewable Partners, and Microsoft. The Motley Fool has a disclosure policy.

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