Brookfield merger a big plus

Article Excerpt

BROOKFIELD RENEWABLE POWER FUND $27.40 (Toronto symbol BRC.UN; Units outstanding: 104.7 million; Market cap: $2.9 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.7%; www.brpfund.com) plans to merge its assets with the extensive hydroelectric and wind power holdings of Brookfield Asset Management (symbol BAM on Toronto). Brookfield Renewable now owns interests in 42 hydroelectric generating stations on 16 river systems in Quebec, Ontario, B.C. and New England, as well as two wind farms. It has 1,700 megawatts of generating capacity in total. The combined entity, which will be called Brookfield Renewable Energy Partners L.P., will own 179 power plants generating 4,800 megawatts of electricity. Roughly 40% of its generating capacity will be in Canada, with another 40% in the U.S. and 20% in Brazil. We think the merger is positive for Brookfield Renewable unitholders. The new company will raise its distribution from the current $1.30 per unit to $1.35. That will give it a yield of 4.9%, based on today’s price. The move also…

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