Topic: How To Invest


BROOKFIELD RENEWABLE ENERGY PARTNERS L.P. $37.27 (Toronto symbol BEP.UN; Units outstanding: 265.2 million; Market cap: $10.1 billion; TSINetwork Rating: Extra Risk; Dividend yield: 6.6%; owns 207 hydroelectric generating stations, 37 wind farms and five natural gas-fired plants. In all, it has over 7,284 megawatts of generating capacity.

Roughly 24% of that capacity is in Canada, with another 50% in the U.S., 13% in Latin America and 8% in Europe.

In the three months ended September 30, 2015, Brookfield’s cash flow per share rose 2.2%, to $0.46 from $0.45 a year earlier.

To further boost its power output, Brookfield will keep acquiring or building hydroelectric plants and wind farms. To cut its risk, it now sells virtually all of its electricity under long-term agreements. They are an average of 24 years long. Brookfield also acquires firms with long-term contracts in place.

The company is part of the consortium buying Isagen SA from the Colombian government. Isagen owns six hydroelectric plants and is Colombia’s third-largest power generator. Brookfield will initially buy a 9% interest for $243 million U.S. It will then add a further 16% for $517 million U.S. The full 25% increases its generating capacity by 14%.

Brookfield’s units trade at 11.7 times its forecast 2016 cash flow of $3.18 a share. The company has just raised its dividend by 7.2%. It now yields 6.6%.

Brookfield Renewable Power remains a buy.


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