With a 5% Dividend Yield, Is it Time to Buy Brookfield Renewable Partners?

There’s a lot to like about this high-yielding renewable energy stock.

Nicholas Dobroruka

Nik has been writing for The Motley Fool Canada since 2020. After studying marketing at University in his hometown of Montréal, Nik decided to pack up and move west to Vancouver. By day, Nik is a digital media ninja, specializing in Programmatic advertising. By night, you can find him either Mountain biking in Vancouver’s famous North Shore trails or writing for TMF Canada. Tech, digital payments, and renewable energy are three areas that Nik enjoys following and writing about.

Published November 9, 2023 9:30 am EST

| More on: BEP.UN

Renewable energy investors have not had much to cheer about over the past few years. In the Canadian stock market, the renewable energy sector as a whole has mostly been on the decline since early 2021. However, it’s worth remembering that 2019 and 2020 were both two excellent years for green energy investors. Part of the pullback that we’ve witnessed since 2021 could be due to the massive gains in such a short amount of time.

Investing in the renewable energy sector

With the poor performance over the past three years, is now really a great time to be loading up on a renewable energy stock? I’d strongly argue that if you’re in it for the long haul, now could be a great time to put money to work in the beaten-down sector. Fortunately, for Canadian investors, there’s no shortage of discounted renewable energy stocks to choose from on the TSX today.

We’ve been witnessing a steady rise in demand for clean energy in recent years. In addition, I’d say it’s hard to make a case that we won’t continue seeing this same trend rollout over at least the next decade. That’s one of the key reasons why I’m a bullish long-term renewable energy investor.

While it’s certainly proven to be a volatile sector, it’s hard to deny the long-term growth potential in the renewable energy market. With that in mind, I’ve reviewed a global leader that is perfect for anyone looking for exposure to the sector.

Brookfield Renewable Partners

At a market cap of $20 billion, Brookfield Renewable Partners (TSX:BEP.UN) is among the top players in the space. Not only is the company a leader in Canada but internationally as well. Brookfield Renewable Partners has a presence in North and South America, Europe, and Asia.

In addition to its international footprint, Brookfield Renewable Partners also owns a wide variety of renewable power-generating facilities.

Shareholders of Brookfield Renewable Partners gain instant exposure to the sector, making it a perfect energy stock to own for anyone new to the space.

High yields and market-beating growth

It’s hard not to notice some of the sky-high dividend yields in the renewable energy sector. The pullback that began in 2021 has sent yieldings soaring for many green energy stocks, including Brookfield Renewable Partners.

At today’s stock price, the company’s annual dividend yield is nearing an incredible 6%. Of course, a near-6% yield isn’t exactly sustainable over the long term. As the stock gets back on track, the dividend yield will naturally decline. However, for the time being, it’s certainly another good reason to buy renewable energy stocks today.

Dividend yields aside, this stock has had no trouble delivering market-beating returns in recent years. Despite shares being down close to 50% from all-time highs, the stock has more than doubled the returns of the S&P/TSX Composite Index over the past five years.

Foolish bottom line

At today’s prices, the renewable energy sector may not seem all that attractive. No one knows for sure how much longer this decline will last. However, what I am personally comfortable betting on is the long-term growth potential of clean energy consumption in the coming years.