Brookfield Renewable Partners (BEPC): The case for its 5.5% yield

By:
on May 9, 2024
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  • Brookfield Renewable Partners stock has soared by over 35% from the YTD low.
  • The company owns some of North America and Europe's biggest hydroelectric energy projects.
  • Demand for renewable energy is expected to rise as data center and EV trend continues.

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Brookfield Renewable Partners (NYSE: BEP) stock price has rebounded sharply in the past few weeks. It has jumped in the past three consecutive weeks and is hovering at its highest point since December last year. It is up by over 35% from its lowest point this year. 

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BEP is a top class company

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Brookfield Renewable Partners is one of the leading energy companies in North America with a market cap of over $12 billion. Unlike NextEra Energy Partners, BEP focuses mostly on hydroelectric power, which accounts for 55% of its total revenue.

Hydro is followed by wind, solar, and distributed energy and storage businesses. Most of its operations are in North America followed by Europe, South America, and Asian. In its most recent results, the company said that its assets have an operation capacity of over 32,500 MW.

BEP’s business is doing well as demand for energy rises globally, a situation that will accelerate in the next decade. This trend will continue because of key energy shifts such as decarbonisation and investments in electric vehicles and artificial intelligence. 

BEP’s business is showing modest growth. Its total revenue rose from $3.9 billion in 2019 to over $5 billion in 2023. The most recent results showed that its revenue jumped from $1.3 billion in Q1’23 to $1.49 billion in Q1’24. 

While BEP has made losses in the past few years, its Funds From Operations (FFO) have grown as 4,200 MW of new developments reached commercial stage and as its prices rose. It made an FFO of over $296 million in the last quarter and over $1.09 billion in 2023.

BEP is also well-capitalized as it has over $4.4 billion in available liquidity, a substantial sum for a company with a market cap of over $12 billion. That means that the company has adequate resources to continue acquiring quality assets. 

BEP acquired companies like Westinghouse, a leading player in the nuclear energy sector in a $4.3 billlion deal. It also bought companies like Deriva Energy, X-Elio, and made two investments in India.

I believe that Brookfield Energy Partners will likely continue doing well in the next few years as clean energy demand rises. For investors, the company also benefits from its partnership model, meaning that its earnings are not subjected to income tax level.

Brookfield Energy Partners stock price analysis

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Brookfield Renewable partners

BEPC chart by TradingView

Turning to the weekly chart shows that the BEP stock price has rebounded recently. This rebound happened after the stock formed a small hammer pattern in April. Hammer is one of the most popular bullish signs in the market.

The stock also formed a double-bottom pattern,  a popular reversal sign. Most importantly, it has now crossed the 50-week and 100-week Exponential Moving Averages (EMA) and is nearing the neckline of the double-bottom at $27.5.

BEP has also jumped above the 50% Fibonacci Retracement level while the two lines of the MACD indicator are nearing the neutral point. 

The stock has also moved to the upper side of the descending channel. Therefore, it is likely to continue rising, with the next point to watch being at $34, the 23.6% retracement point. This price is also at the median level of the Andrew’s pitchfork tool.

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