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The S&P Clean Energy Index has an annual return of 6.4% for the past five years. This is a modest uptick.
However, Saqib Iqbal, a financial analyst at Trading.Biz, has found a renewable stock with a dividend yield of 6% and has a chance of increasing by 24%. The stock he is referring to is Brookfield Renewable Partners LP (NYSE: BEP).
He said, “As demand for renewable energy grows, renewable stocks are licking their lips. Among these, Brookfield Renewable stands out.
Firstly, it has maintained consistent dividends for the past 30 years, and the dividend yield is expected to rise to 9%. Secondly, the free cash flow the company is generating is astounding, and when you combine the fundamentals with the current undervaluation, it can increase by 24%. Dividends and capital appreciation; the best combo.”
Brookfield Renewable is a publicly listed limited partnership that owns and runs renewable energy assets and is headquartered in Toronto, Canada.
In the previous quarter, Brookfield Renewable Partners LP (NYSE: BEP) had a strong performance, with a 10% year-to-date increase in FFO per unit. The corporation generates reasonably consistent cash flow.
It sells most of its electricity to utilities and large business clients through long-term power purchase agreements (PPAs).
Because power tariffs are linked to inflation, these PPAs offer with highly predictable cash flow that continually grows. That’s why it gives around a 6% dividend yield. BEP has performed approximately $1.3 billion in stock transactions, keeping more than $4.5 billion in cash and raising $650 million through equity issuance.
Demand for renewable energy, particularly from IT companies, will likely increase in the coming years.
Their announcement of the significant purchase of Duke Energy Renewables solidifies their standing as the leading renewable energy provider in the US. It holds significant possibilities for cost savings and repowering.
BEP technical analysis: Looking to regain
The BEP stock has been battered since the start of the year and is down by more than 14%. However, Saqib thinks this is a great dip to act on.
On the daily chart, the stock broke its support level on February 8th and is now heading for a 21.99 support level.
On the upside, the next resistance for the stock lies at 26.80, the level it reached on January 31. If it breaks this level, it can go towards 27.40 followed by 28.70., that’s an increase of 24%.
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