Brookfield Renewable vs. Clearway Energy: Dividend Showdown

In the ongoing debate on renewable energy investments, Brookfield Renewable and Clearway Energy stand out. Both offer attractive dividends, with Brookfield at 5.5% and Clearway above 6.5%. Investors must assess their growth potential and immediate income needs in this competitive landscape.

Date: 16-01-2025

AI Rating: 7

Dividend Yield: Brookfield Renewable currently offers a yield of nearly 5.5%, whereas Clearway Energy boasts a higher yield of over 6.5%. This higher yield positions Clearway as a more appealing option for investors seeking immediate income.

Growth Prospects: Brookfield Renewable expects FFO per-share growth exceeding 10% annually through 2029, which is very visible and secured. Its diversified assets in hydroelectric, wind, and solar energy give it an edge in growth potential. In contrast, Clearway Energy anticipates CAFD growth of 7.5% to 12.5%, supporting its dividend growth in the 5% to 8% range.

Market Position: Brookfield Renewable is one of the largest clean energy developers globally, with around 200 GW in the pipeline. Meanwhile, Clearway focuses on clean energy assets within the U.S. with approximately 11.7 GW of capacity, indicating a more concentrated strategy.

Investment Strategies: Investors looking for reliable income in the short term may gravitate toward Clearway due to its higher dividend yield. However, for those interested in higher long-term total returns, Brookfield Renewable may be the more attractive investment due to its anticipated faster cash flow growth.

Conclusion: Both companies offer unique advantages, but their future growth trajectories and dividend policies could lead to significant differences in stock price movements. Investors must weigh immediate income needs against long-term growth potential when making their choice.

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