BROOKFIELD RENEWABLE ENERGY PARTNERS L.P. $31.49 (Toronto symbol BEP.UN; Units outstanding: 265.2 million; Market cap: $8.3 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.8%; www.brpfund.com) owns 196 hydroelectric generating stations, 11 wind farms and two natural-gas-fired plants. In all, it has 6,000 megawatts of generating capacity.
Roughly 31% of Brookfield’s generating capacity is in Canada, with another 52% in the U.S. and 17% in Brazil.
In the quarter ended December 31, 2013, revenue rose 24.0%, to $393 million from $317 million a year earlier. Cash flow jumped to $137 million, or $0.52 a share, from $74 million, or $0.28.
The gains were due to 30.0% higher electricity generation due to favourable rain and wind.
To further boost its power output, Brookfield plans to keep acquiring or building hydroelectric plants and wind farms. To cut its risk, it sells virtually all of its electricity under long-term agreements that are an average of 24 years long.
The company just bought 33% of the Safe Harbor facility, on Pennsylvania’s Susquehanna River, for $289 million. With 417 megawatts of capacity, Safe Harbor is one of the largest hydroelectric facilities in the northeastern U.S.
The units trade at 13.7 times Brookfield’s forecast 2014 cash flow of $2.30 a share. The company has just raised its quarterly distribution by 6.9%, to $0.3875 from $0.3625, for a 4.8% yield.
Brookfield Renewable Power is still a buy.
