The Perfect Renewable Energy Stock with Value, Growth and Passive Income

Published on: Jun 14, 2024
Author: Caroline Kong

Since the beginning of 2021, Canadian renewable energy stocks have been trending lower, with most of the leading stocks, including Brookfield Renewable Partners (TSX:BEP.UN) falling.

In the short term, investors have little interest in renewable energy stocks except for passive income. However, over the long term, some renewable energy stocks that offer both value and growth are great investment. Most importantly, now is the time to consider buying.

Brookfield Renewable Partners

This C$20 billion company has a diversified portfolio of renewable energy assets around the world, including solar, wind and hydroelectric facilities in North and South America, Europe and Asia. In addition, the company provides energy storage services in these regions, as well as 21 gigawatts of installed capacity in various locations. The diversified model means that a slowdown in one certain area of the market won’t affect the company as much.

Over the past three years, excluding dividends, Brookfield Renewable Partners shares are down nearly 40% since the beginning of 2021. But even so, this growth stock has still outperformed the S&P/TSX Composite Index by nearly 50% over the past five years.

In addition to the share price discount and long-term growth potential, Brookfield Renewable Partners generates significant passive income. With the stock’s recent pullback, the dividend yield has soared to 5%. Going forward, the dividend yield should decline as this energy stock begins to rally higher. But for now, it’s wise to grab the 5% dividend yield while locking in this growth stock with great value.

It’s hard for investors not to be optimistic about the long-term opportunities in the renewable energy sector, despite all the challenges it has faced over the past few years. Artificial intelligence technology and the power it requires will reshape the discussion about energy pricing, and as a result, demand for green energy is only expected to continue to grow.

With a leading position in the global renewable energy market, investing in Brookfield Renewable Partners provides immediate, diversified investment opportunities. With the Bank of Canada beginning to cut interest rates, now is an excellent time to buy this stock.

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