Brookfield Renewable is proactively preparing for expansion in 2030, setting aside the 2025 milestone.
Looking at Brookfield Renewable (BEP 0.13%), it's more than just a clean energy company. This business is a complex web involving three distinct stock tickers, with Brookfield Asset Management (BAM 3.93%) at its core. Brookfield Asset Management, a long-established Canadian asset manager, saw potential in the clean energy sector and created Brookfield Renewable as a means to fund its investments.
Investors have two options to purchase Brookfield Renewable: the partnership and the regular corporate share classes. The partnership, which initially catered to smaller investors, now has a distribution yield of 6.1%. The corporate share class, created for larger investors like pension funds, offers a dividend yield of 5%, despite being more popular and trading with a lower yield.
As for the business itself, it provides exposure to solar, wind, hydroelectric, storage, and nuclear industries, making it almost a one-stop shop in the renewable power sector. With investments across the globe, from North America to Asia, Brookfield Renewable has a versatile and wide-ranging portfolio.
Despite operating like an asset management business, Brookfield Renewable has been evolving to adapt to the ever-changing clean energy sector. The company's portfolio has expanded twofold since 2020, with development capacity up a whopping 9x. This growth is expected to continue, with construction plans increasing in 2025 and beyond.
Unfortunately, Brookfield Renewable has been out of favor on Wall Street lately. But its strategic moves, such as expanding in solar and wind and venturing into storage, demonstrate a focus on long-term growth. Its future-proof strategy should ensure the company's competitive edge, irrespective of what happens in the stock market over the coming years.
Enrichment Insights:
- Diversified Platform: Brookfield Renewable boasts a broad portfolio of renewable energy solutions, with investments in solar, wind, hydroelectric, storage, and nuclear technologies. This diversity helps mitigate technological risks and caters to a wide range of customers in various markets.
- Long-term Thinking: Brookfield Renewable's strategic approach focuses on long-term value creation. The company's self-funded growth model allows it to rotate capital effectively, invest in high-growth opportunities, and generate solid returns.
- Expansion Plans: With a robust pipeline of over 200,000 megawatts, including 66,000 megawatts at an advanced stage, Brookfield Renewable is well-positioned to expand its generating capacity and market share in key regions. Committed to augmenting its annual renewable energy capacity by 10,000 megawatts, the company has forged strategic partnerships to meet surging corporate demands for electricity.
- Solid Financial Performance: Brookfield Renewable's financial performance shows impressive results. In 2024, the company generated a record $1.2 billion in funds from operations (FFO), marking its 14th consecutive year of at least 5% annual distribution growth.
- To diversify their investing portfolio, some individuals might consider purchasing equity in Brookfield Renewable, given its involvement in various renewable energy sectors such as solar, wind, hydroelectric, storage, and nuclear.
- In the realm of finance, Brookfield Asset Management is employing a tactic to fund its clean energy investments by utilizing the renewable energy company, Brookfield Renewable, as a vehicle.
- For those looking to invest in the clean energy sector with a focus on long-term gain, Brookfield Renewable's strategic moves, like expanding in solar and wind and venturing into storage, could be attractive.
- As part of their investment strategy, institutional investors like pension funds have the option to invest in Brookfield Renewable's corporate share class, offering a lower dividend yield than the partnership class but still guaranteeing a decent return of 5%.
