This More Than 5%-Yielding Dividend Stock Looks Like a Can't-Miss Buy for Income and Upside Potential

Matt DiLallo, The Motley Fool

Sun, May 4, 2025, 2:14 PM 5 min read

• Brookfield Renewable delivered strong first-quarter results.

• The company is in an exceptional position to capitalize on the growing demand for renewable energy.

• That positions Brookfield to generate strong total returns for investors.

There aren't a lot of can't-miss investing opportunities out there. However, Brookfield Renewable (NYSE: BEPC)(NYSE: BEP) certainly seems to be one of them. The leading global renewable energy company is capitalizing on the surging demand for clean power, which should continue for decades.

Few companies in the sector can match Brookfield's scale, expertise, and balance sheet strength. Those and other factors put it in a strong position to create a lot of value for investors in the coming years, which includes paying a lucrative and growing dividend (more than 5% current yield).

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Brookfield Renewable recently reported strong first-quarter results. The company generated a record $315 million, or $0.48 per share, of funds from operations (FFO). That was up 7% from the year-ago period and 15% after adjusting for the strength of its hydro generation last year.

The renewable energy company benefited from the stable, inflation-linked cash flows produced by its diversified global operating fleet of hydro, wind, solar, and energy storage assets. It also got a boost from its growth activities, which include its accretive capital recycling strategy. Brookfield routinely capitalizes on the value disconnect between its existing assets and higher returns on new investment opportunities.

For example, Brookfield and its partners have closed or agreed to sell $900 million of assets this year ($230 million net to Brookfield). Brookfield capitalized on strong demand from private investors for highly contracted renewable energy assets. It recently closed the sale of its interest in First Hydro at almost 3 times its invested capital and another 25% stake in the Shepherds Flat wind farm at almost 2 times its investment capital.

Brookfield is redeploying those proceeds into attractive new investment opportunities. The company recently agreed to buy National Grid's renewables platform. The fully integrated U.S. onshore operator and developer has 3.9 gigawatts (GW) of operating and under-construction assets, a 1 GW pipeline of construction-ready projects, and over 30 GW of primarily utility-scale solar and battery storage development projects. The company also closed the acquisition of the remaining interest in leading European renewable energy developer Neoen.