1 Utility Company That’s a Gift From the Stock Market Crash

Utility companies have been too expensive to buy for over a year, but are finally reasonable enough to start buying. Picking up a company like Brookfield Renewable Energy LP (TSX:BEP.UN)(NYSE:BEP) is a great idea at these levels thanks to the recent fall in the stock price.

| More on:

One thing you need to keep at the top of your mind is the fact that this is likely to be a very deep, long-lasting recession. The government, households, and many companies simply don’t have the cash on hand to ride out a recession without seriously cutting back on spending. People had been warned for ages, but that doesn’t count for much, as we’ll soon see.

The good news is that if you have been responsible, you should have plenty of cash on hand to buy pretty much any asset you want. Deflation is terrible for those who have debt, but great for those who have cash.

In this article, I’m selectively focusing on quality companies whose earnings can go undergo a long, drawn-out recession with ease. 

I have been suggesting selling utility companies, at least in small amounts, for some time now as they were very expensive. Now that the stock market crash has knocked down good and bad companies alike, utility companies are once again worth buying.

This is a great buy today

One company worth including is Brookfield Renewable Energy LP (TSX:BEP.UN)(NYSE:BEP). This is one of the best names in the renewable energy space. It is globally diversified, has excellent assets, and is in a long-term high-growth space of sustainable energy.

This company can give you excellent income and dividend growth for decades, making this blip a fantastic buying opportunity for income investors.

The company is located in multiple countries including India, China, Europe, and South America. While this may not be appealing for some in the short-term, global diversification allows the company to take advantage of growth both in Canada and abroad. Demand for power is certainly growing faster in developing nations, so this is a great way to benefit from future growth.

The company has over 19000 megawatts of generating capacity from wind, hydro, and solar power. It is for this reason that this is known as one of the best pure-play stocks in the renewable energy space. Most of their income comes in the form of long-term, inflation-linked contracts that guarantee earnings visibility for debt repayment and dividends.

The company, after the drastic downturn, has a yield in excess of 5%. This yield is forecast to grow by 5-8% annually, a growth rate that is underpinned by its steady income and cash flows. 

This is the kind of company you want to own at this stage of the market — a company that produces high-demand products that can be used at any stage of the cycle.

The bottom line

The market can be a scary place, and right now is no exception. With things falling apart, now is not the time to be cute with your investment strategy.

Buy things with a long-term time horizon, as this recession could last a long time. This does not look like a short-term blip, so make sure you take a conservative approach with your investing capital.

For this reason, invest in things that can last the good times. Buying shares of a company like Brookfield Renewable is a great way to collect a great yield while investing for the long haul.

You will appreciate the income you gain from this company as you wait for the economy to turn around.

Should you invest $1,000 in TransAlta right now?

Before you buy stock in TransAlta, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and TransAlta wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,345.77!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*.

See the Top Stocks * Returns as of 4/21/25

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 Kris Knutson owns shares of Brookfield Renewable Partners.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

Canadian dollars in a magnifying glass
Dividend Stocks

If I Could Only Buy and Hold a Single Monthly Payer, This Would Be it

Long-term investors seeking monthly income should take a closer look at discounted Granite REIT for a generous yield.

Read more »

dividends can compound over time
Dividend Stocks

Is Fiera Stock a Buy for its Dividend Yield?

Fiera stock has one amazing dividend yield right now, but what else should investors consider?

Read more »

The sun sets behind a power source
Dividend Stocks

This Dividend Champion Has Paid Dividends for 51 Straight Years

All hail this dividend king for its proven potential to provide stable, reliable, and growing income.

Read more »

Person holding a smartphone with a stock chart on screen
Dividend Stocks

The Smartest Telecom Stock to Buy With $3,500 Right Now

Smart TFSA move? Telus stock shines for income & growth, outpacing rivals with a 7.7% dividend yield, two decades of…

Read more »

hand stacks coins
Dividend Stocks

I’d Put $7,000 in These Legendary Dividend Growers to Earn for the Next Decade

If you've got some cash for your TFSA, here are two stocks that should give you growing dividend income and…

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Here’s How to Catch up to the Average Canadian TFSA at Age 45

The TFSA can create immense passive income, and this dividend stock is an excellent choice.

Read more »

edit Safe pig, protect money
Dividend Stocks

How I’d Secure My Retirement With a $7,000 Investment Today

If you have the discipline to invest with a long-term strategy, here’s how you can use $7,000 in a TFSA…

Read more »

Canadian flag
Dividend Stocks

TFSA: 3 Canadian Stocks to Buy and Hold for Life

The TFSA is the perfect place to create income for years, and these three are the best Canadian stocks to…

Read more »