The Attraction of High-Yield Dividend Stock Brookfield Renewable

For some time now, Brookfield Renewable has been an attractive stock for investors seeking a solid dividend yield. As an investor who has been purchasing shares for a number of years, the renewable energy powerhouse holds a substantial spot in my investment portfolio, largely due to its appealing dividend yield which significantly outperforms the average stock.

The commitment to keep investing in Brookfield Renewable comes from a blend of its high-yield dividends and the potential for growth, presenting a beneficial opportunity for investors looking for long-term income.

An Appealing, High-Yield Dividend

The driving force behind the desirability of Brookfield Renewable is its dividend offering. It stands out for three main reasons:

• Impressive Yield: At about 4.7%, the yield is substantially higher than the approximate 1.5% yield of the S&P 500 index.
• Sustainability: The company's steady cash flow, moderate dividend payout ratio, and robust balance sheet ensure that the dividends are sustainable.
• Consistent Growth: There's a reliable history of dividend increases, with an annual bump of at least 5% over the past twelve years.

What sets Brookfield Renewable apart is not just the high dividend yield but its ability to maintain that through a solid business foundation. This is anchored by the company's strategy of entering into long-term power purchase agreements, where 90% of its electricity production is secured on an average of 13 years. Additionally, a significant portion of these contracts include inflation adjustments, contributing to continual growth in operations cash flow.

Brookfield Renewable's portfolio is well-diversified across different technologies, regions, and customer groups, minimizing risk and enhancing growth potential. Furthermore, the company boasts an excellent credit rating and a sturdy financial position that allows it to invest in development projects and pursue strategic acquisitions.

Prospects for Growth

Brookfield Renewable doesn't just offer a strong dividend; it also presents a significant growth potential. It has consistently grown its funds from operations (FFO) per share, which in turn has allowed for sustained increases in dividend payouts. This pattern of growth and the provision of income have combined to produce returns that edge out the broader market.

With several growth levers, including inflation-linked contracts, optimizing existing assets, developing new projects, and acquisitions, Brookfield Renewable is poised to maintain a solid growth trajectory. These factors should enable it to continue delivering high single-digit to low double-digit growth in FFO per share. As a result, the company can keep on raising its dividend, projecting an annual increase of 5% to 9%.

A Well-Rounded Investment

Ultimately, Brookfield Renewable represents a compelling investment package. It combines a sustainable, high-yield dividend with the prospect of robust earnings growth. With nearly a 5% yield and the capacity for double-digit earnings growth, Brookfield Renewable is positioned to continue offering impressive total annual returns. This balance of low-risk investment and the potential for high returns explains the ongoing enthusiasm for investing in this renewable energy leader.

renewable, dividend, investment