Is Brookfield Renewable the Best Dividend Stock for You?

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Stock market investing is an inherently risky way to put your money to work, especially when uncertainty looms overhead. However, opportunities exist for the more risk-averse investor seeking a degree of stability in a turbulent market.

Investing in reliable dividend stocks is one such way to generate returns during volatile market conditions. Even when share prices decline, the quarterly or monthly distributions from dividend stocks can keep lining your account balance with more cash. However, successful dividend investing requires strategic thinking.

To get the best value for money, you must identify a dividend stock capable of sustaining shareholder dividends. Besides reliable dividend payouts, it should also have the potential to deliver returns through capital gains. To this end, I will look closely at Brookfield Renewable Partners (TSX:BEP.UN).

Renewable energy is the future

Environmental sustainability has become an increasingly important concern worldwide. Investing in renewable energy can do more for investors than helping them align with environmentally responsible practices. Renewable energy stocks like Brookfield Renewable are also assets offering excellent investment returns.

With the world phasing out traditional energy and replacing it with sustainable energy, renewable energy investors can expect to see massive capital gains in the coming decade. Besides the immense growth potential of the renewable energy industry, reliable dividend income can also grow investor wealth with consistent payouts.

Why Brookfield Renewable is an excellent pick

While there are plenty of renewable energy companies, Brookfield Renewable Partners stock sets itself apart from the rest. As of this writing, BEP.UN stock trades for $33.70 per share, offering investors payouts at a juicy 5.41% annualized forward dividend yield.

If you seek dividend income at attractive yields, investing in its shares at current levels can help you lock in a juicy dividend yield.

Besides its high-yielding dividends, BEP.UN stock also appears attractively priced. At current levels, it boasts a 103.9 forward price-to-earnings ratio. It means share prices can go up substantially in the coming months.

As one of the largest players in the renewable energy industry worldwide, it boasts an extensive network of hydroelectric, solar, and wind energy facilities. Its geographically diversified portfolio totals approximately 31.3 gigawatts of installed capacity, with 134,400 megawatts of renewable projects in its development pipeline.

Foolish takeaway

Brookfield Renewable has also delivered improved financial performances lately. In the second quarter of 2023, BEP.UN stock reported funds from operations growth of 10% year over year. The figure shows that the company’s acquisitions, organic development, and robust realized pricing are paying off.

With the expected growth of the renewable energy industry in this decade and the company’s wide economic moat funding further acquisitions and development, the future looks promising for Brookfield Renewable Partners stock.

If you are an income-focused investor also targeting long-term wealth growth through capital gains, Brookfield Renewable Partners can be a strong contender for a place in your self-directed portfolio.

The post Is Brookfield Renewable the Best Dividend Stock for You? appeared first on The Motley Fool Canada.

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See the 5 Stocks
* Returns as of 8/16/23

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Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Renewable Partners. The Motley Fool has a disclosure policy.