Reuben Gregg Brewer, The Motley Fool
5 min read
In This Article:
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Wind power is expected to expand by 5x over the next 20 years or so.
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Solar power is projected to increase by 7x.
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With so much opportunity, this 6.2%-yielding investment has a long growth runway ahead.
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10 stocks we like better than Brookfield Renewable Partners ›
The world is in the middle of an energy transition. It isn't the first time it has gone through a transition, so there's a rough roadmap when it comes to understanding what comes next. The big picture is that energy transitions take decades to play out. That's why dividend investors should be looking closely at this clean energy-focused investment and its major yield.
The modern world doesn't exist without reliable power. That's the core factor to consider here as you examine the energy landscape that exists today and what that landscape may look like tomorrow. Since power isn't optional, the big-picture shift away from dirtier carbon fuels toward cleaner ones that is taking place today simply can't happen overnight. It has to be a slow and steady transition.
In fact, even some of the oldest energy sources haven't been eliminated, even though they have been usurped by newer energy sources. For example, burning wood is still a frequently used power option. While coal use has been falling in the United States, usually being replaced by cleaner-burning natural gas, coal is still a huge force in the world.
That brings the story to solar, wind, and energy storage. These sources of power are growing rapidly and will likely continue to do so for many years. In the United States alone, wind power is projected to increase 5x over by 2050. Solar is expected to increase by 7x. And battery storage, which is very small today, is projected to grow so much that the numbers aren't meaningful.
The big takeaway is that there's likely to be huge growth ahead for clean energy investments. One of the best ways to take advantage of that growth is Brookfield Renewable (NYSE: BEP)(NYSE: BEPC) and its lofty yield of up to 6.2%.
Brookfield Renewable is controlled by Brookfield Asset Management (NYSE: BAM). Brookfield Asset Management has a 100-year-plus history of successfully buying, operating, and selling infrastructure assets on a global scale. This is actually an important fact to keep in mind because Brookfield Renewable is not operated like a utility. It's operated more like a private equity shop, buying, operating, and selling assets over time.
Brookfield Renewable's portfolio spans the entire clean energy spectrum. It owns hydroelectric, solar, wind, battery, and even nuclear power businesses. Those businesses are spread across North America, South America, Europe, and Asia. Given the multi-decade growth opportunity ahead, Brookfield Renewable is likely to see material growth in its business, and it can play wherever clean energy growth is offering the most attractive investment opportunities.
