Best Stock to Buy Right Now: Brookfield Renewable vs TransAlta Renewables?

These two energy stocks look primed to explode, and at these prices, investors would do well to pick them up now.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published March 12, 2025 11:45 am EDT

| More on: BEP.UNTA

In the bustling world of renewable energy, it can be hard to find companies that look like great future outcomes, especially when it comes to stability in a sector still finding its footing. Yet two Canadian giants, Brookfield Renewable Partners (TSX:BEP.UN) and TransAlta (TSX:TA), have been making waves. Both companies have recently released their earnings reports, shedding light on their financial health and future prospects.

Offshore wind turbine farm at sunset — Source: Getty Images

Into earnings

Brookfield Renewable Partners reported record funds from operations (FFO) of $1.217 billion for the 12 months ending December 31, 2024, marking a 10% increase per unit compared to the previous year. This impressive performance underscores the company’s robust operational efficiency and strategic growth initiatives.

On the other hand, TransAlta Corporation’s fourth-quarter results painted a slightly different picture. The energy stock reported sales of $678 million, up from $624 million in the same period the previous year. However, it also recorded a net loss of $65 million for the quarter, an improvement from the $84 million loss in the prior year’s quarter.

Over the past year, Brookfield’s market capitalization has experienced fluctuations, reaching $10.87 billion in September 2024 and settling at $8.97 billion by December 2024. Despite these changes, the energy stock’s enterprise value remained robust, standing at $55.86 billion at the end of 2024.

TransAlta’s market capitalization also saw variations, peaking at $6.05 billion in December 2024 before adjusting to $4.18 billion by the year’s end. The energy stock’s enterprise value followed a similar trend, reaching $9.34 billion in December 2024.

Future outlook

Looking ahead, Brookfield Renewable Partners continues to expand its renewable energy portfolio. The energy stock commissioned approximately 1,200 megawatts of new capacity in the third quarter alone and is on track to add a total of 7,000 megawatts for the year. This aggressive expansion strategy positions Brookfield favourably in the growing renewable energy market.

TransAlta, meanwhile, has been focusing on enhancing its operational efficiency. The energy stock achieved an average fleet availability of 91.2% in 2024, reflecting its commitment to maintaining a reliable energy supply. Plus, TransAlta returned $214 million to shareholders through dividends and share repurchases, signalling a strong commitment to shareholder value.

Both companies have also been active in strategic acquisitions and partnerships. Brookfield’s landmark agreement with Microsoft aims to deliver over 10.5 gigawatts of new renewable energy capacity between 2026 and 2030, highlighting its commitment to large-scale renewable projects.

TransAlta’s acquisition of Heartland added 1.75 gigawatts of capacity, enhancing its competitive position in Alberta. This move is expected to contribute an estimated $175 million annually to the company’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), strengthening its financial outlook.

Bottom line

Both Brookfield Renewable Partners and TransAlta Corporation have demonstrated resilience and adaptability in the evolving renewable energy landscape. Brookfield’s robust financial performance and ambitious expansion plans position it well for future growth. TransAlta’s focus on operational efficiency and strategic acquisitions underscores its commitment to enhancing shareholder value. Investors would do well to keep an eye on these two energy stocks as each continues to navigate the dynamic energy sector.