Brookfield Renewable Poised for Strong Growth Amid Rising Prices

Brookfield Renewable is set to benefit from rising power prices and increasing demand for clean energy. The company is expected to deliver double-digit growth in FFO per share over the next decade, making it an attractive stock for long-term investment.

Date: 10-03-2025

AI Rating: 8

Positive Growth Drivers: The report outlines significant drivers for Brookfield Renewable, highlighting its diversified portfolio and market positioning in renewable energy. The ongoing contracts, accounting for 90% of its capacity, provide stability and ensure predictable revenue growth.

Earnings Growth Expectations: Notably, Brookfield is anticipating a consistent growth in funds from operations (FFO) at a rate of 2% to 3% per share yearly, which will accumulate to $150 million in additional annual FFO by 2029. This growth expectation is directly correlated with inflation-indexed power rates established in existing contracts.

Market Trends: As the demand for electricity is projected to exceed inflation due to factors like increased needs from data centers, Brookfield expects to benefit financially from the expiring contracts. The company estimates an additional $100 million in FFO from re-signing contracts at higher market prices, enhancing its annual growth trajectory.

Capacity Expansion: Currently operating 37 GW of renewable energy capacity, Brookfield is on target to ramp up its development efforts, aiming for 10 GW annually by 2027 and has 65 GW of projects lined up. This significant project pipeline promises to add 4% to 6% to its FFO per share yearly through the decade.

M&A Strategy: With a proactive merger and acquisition strategy, managing approximately $100 billion in potential M&A, Brookfield showcases an intention to enhance its growth profile which could further secure FFO growth rates above 10% in the coming years.

High Dividend Yield: Coupled with a high dividend yield exceeding 5%, the company presents an enticing investment opportunity that could yield total annualized returns in the mid-teens, signifying strong investor interest in holding stock over the long term.

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