This Green-Energy Growth Stock Could Make You $11,000 in 5 Years

Brookfield Renewable Partners LP (TSX:BEP.UN)(NYSE:BEP) is an outperforming growth stock that could richly reward investors by 2025.

| More on:

Imagine a buy-and-hold stock that saw almost 100% returns last year, capable of outrunning a recession while not only paying dependable dividends but actually growing them during a downturn rather than downsizing. These types of stocks are rare, but there is at least one such investment opportunity on the TSX that could reward richly while outpacing a widespread market downturn.

Headquartered in Toronto, Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP) does what it says on the tin: 60% owned by Brookfield Asset Management, Brookfield Renewable Partners is the owner and manager of a raft of hydroelectric, wind, solar, biomass, and other green and renewable energy operations. It saw significant 91% total returns in 2019, and pays a forward dividend yield in the region of 4.7%.

With projected total shareholder returns of 110% in five years, investors who stack shares to the value of $10,000 in Brookfield Renewable Partners today could earn $11,000 by the middle of the 2020s, comprised of income plus the capital appreciation. Therefore, not only is Brookfield Renewable Partners ready for a downturn, having outperformed significant market turbulence, it’s also a sturdy growth stock.

Tapping into the green economy is one of the strongest plays for a new investor coming to the TSX with a growth-plus-dividends strategy right now. Other names in the space include Northland Power, Algonquin Power & Utilities, and TransAlta Renewables. The green economy extends beyond energy, too, with electric vehicles leading the charge in auto sector growth for example.

What can ethical investors expect in 2020?

Green energy is one of the biggest growth trends in the world, potentially the most significant in the 20s, with huge implications for the markets and for growth investors. In a sign of the times, investment management firm BlackRock made historic news this week when it announced that it would be focusing on sustainability as a central investment thesis going forwards.

In Larry Fink’s letter to CEOs, BlackRock’s CEO stated, “Because capital markets pull future risk forward, we will see changes in capital allocation more quickly than we see changes to the climate itself.” By putting climate change at the centre of portfolio construction and management, the US$7 trillion investment management corporation has helped sound the alarm that climate is going to reshape finance.

Natural gas is likely to catch tailwinds from the demise of coal. Asset managers are more likely to favour renewables and other forms of clean energy production. Nuclear may become mainstream, while wind and solar could start to take off as cost-efficiency increases. Electric vehicles are likely to continue their drive to replace hydrocarbon cars, with key metals such as lithium, copper, palladium, and uranium rocketing.

The bottom line

By making climate change the focal point of a their own investment strategies, Canadians can pack defensive capital appreciation into a stock portfolio centred on dividends. By choosing the right stocks, they can also cream upside plus some significant compounding passive income. With a one-off investment in Brookfield Renewable Partners, they could turn a moderate amount of money into a tidy nest egg within a short timeframe.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Brookfield Asset Management. The Motley Fool recommends BROOKFIELD ASSET MANAGEMENT INC. CL.A LV.

More on Dividend Stocks

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold Forever

Here are 2 TFSA-worthy Canadian stocks. Which one is a good buy for your TFSA today?

Read more »

calculate and analyze stock
Dividend Stocks

This 5.5% Dividend Stock Pays Cash Every Single Month!

This REIT may offer monthly dividends, but don't forget about the potential returns in the growth industry its involved with.

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

How to Use Your TFSA to Earn up to $6,000 Per Year in Tax-Free Passive Income

A high return doesn't mean you have to make a high investment -- or a risky one -- especially with…

Read more »

path road success business
Dividend Stocks

2 High-Yield Dividend Stocks to Buy Hand Over Fist and 1 to Avoid

High yields are great and all, but only if returns come with them. And while two of these might, another…

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

This 7% Dividend Stock Pays Cash Every Month

A high dividend yield isn't everything. But when it pays out each month and offers this stability, it's worth considering!

Read more »

young people stare at smartphones
Dividend Stocks

GST/HST “Vacation”: Everything Canadians Need to Know

The GST/HST "vacation" is a little treat for the holidays, along with a $250 payment. What should you do with…

Read more »

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »