High-Yield Utility That Has Fallen Off Everyone’s Radar


  • Brookfield Renewable Energy yields 6.7%, over 1.7% higher than the typical utility that yields under 5%.
  • The company is riding on the mega-trend train of a global growing demand in renewable energy, and the business has the expertise to bank on acquisition opportunities.
  • The business forecasts dividend growth of 5-9% per year through 2020 and a long-term shareholder return of 12-15%.

I’m primarily a dividend growth investor. So, current income and growth of that income is important to me.

Utilities are typically known for their high yields. So, buying utilities, I expect a good part of returns to come from their dividends. The lower the price goes, the higher the yield climbs. That’s the case with Brookfield Renewable Energy Partners LP (NYSE:BEP), as it has fallen over 18% from a year ago.

Compared to most other popular utilities, Brookfield Renewable has performed quite poorly price-wise in the past year. The utility group typically yields in the 4-5% range, and Brookfield Renewable stands out by yielding 6.7%. But, perhaps, that’s because it is viewed as higher risk with an S&P credit rating of BBB, while the others all have a rating of A-.

To consider it as a potential utility holding, the question you want answered is probably: “Is Brookfield Renewable Energy’s distribution sustainable?” First, let’s find out if it’s the kind of business you want to own.

Business and Assets

Brookfield Renewable has started investing in hydropower facilities 20 years ago. Today, it has become…

This is an excerpt from an article that I first published on Seeking Alpha a few days ago. In fact, Brookfield Renewable is slightly cheaper and therefore yielding 0.1% higher than before. You can read the full article here: High-Yield Utility That Has Fallen Off Everyone’s Radar