This High-Yield Renewable Energy Stock Has Powered Up the Dividend Growth Engine
Renewable Energy

This High-Yield Renewable Energy Stock Has Powered Up the Dividend Growth Engine

Brookfield Renewable Partners has been very active on the strategic front in recent months.

Matthew DiLallo

Energy, Materials, and Utilities

Brookfield Renewable Partners (NYSE:BEP) had enough embedded growth within its existing portfolio to expand its cash flow per share at a 6% to 11% annual rate through 2022. That would give the renewable-energy company enough power to increase its already 5.5%-yielding distribution at a 5% to 9% yearly pace over the timeframe.

However, that hasn’t stopped the company from adding even more power to its growth engine. That was evident in Brookfield’s second-quarter conference call, where CEO Sachin Shah ran through several strategic moves the company made in recent months. As a result, Brookfield Renewable could grow its payout at or even above the top end of its long-term target range in the coming years.

A row of wind turbines with the mountains in the background.

Image source: Getty Images.

We’ve been very active

Shah led off the call by saying, “We advanced our strategic priorities during the quarter, deploying capital in a number of transactions while maintaining a robust balance sheet and access to capital.” He then ran through the list of transactions the company either completed or announced during the quarter:

  • It closed on the acquisition of 210 MW of operating wind capacity in India.
  • The company completed the first phase of a $750 million Canadian (US$563 million) investment into Canadian utility TransAlta‘s hydroelectric portfolio in Alberta.
  • It announced a joint venture with private equity giant KKR (NYSE:KKR) to invest in solar project developer X-Eilo.
  • It unveiled a transaction through its majority-owned TerraForm Power (NASDAQ:TERP) to buy a solar portfolio in the U.S.

Meanwhile, the company raised about $275 million of liquidity by selling some of its South African assets as well as refinancing existing debt. As a result, it ended the quarter with $2.5 billion of available capital. That number will get a further boost after the company took steps to sell the rest of its South African assets as well as non-core portfolios in Thailand and Malaysia. Those deals should bring in an incremental $55 million of cash.

Solar panels under a blue sky at sunset.

Image source: Getty Images.


It’s all about the upside

Brookfield’s CEO spent some time on the call doing a deeper dive into its two most recent transactions. He started off discussing the X-Eilo joint venture with KKR and said it would “own one of the largest solar developers globally, with an experienced management team, best-in-class contracting capabilities, and a proven track record of developing assets at premium returns.” He note

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