- 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. Read More