First Stock Purchase of 2020

BEP-logo

 

Hi everyone and welcome to my latest post. On Thursday January 16th I purchased my first stock of 2020 Brookfield Renewable Partners ( ticker: BEP.UN). This purchase was made in my Tax Free Savings Account (TFSA). As I mentioned in my post My Financial Goals For 2020 this year I would be focusing on my TFSA. I believe this stock can definitely help this account through capital appreciation and rising distributions.

Company Overview

Brookfield Renewable Partners operates one of the world’s largest publicly-traded renewable power platforms. Its portfolio consists of over 18,000 MW of capacity and 5,253 generating facilities in North America, South America, Europe and Asia. Its investment objective is to deliver long-term annualized total returns of 12%–15%, including annual distribution increases of 5–9% from organic cash flow growth and project development. It has an established track record of creating value by prudently acquiring, building and financing assets, and actively managing its operations.

The company is a global leader in hydroelectric power, which comprises approximately 74% of its portfolio. It is also an experienced owner, operator and investor of global wind, solar, distributed generation, and storage facilities.

(Source: company website)

I believe with climate change becoming more and more apart of our lives company’s like Brookfield Renewable Partners are well placed to take advantage of this. In the next 15 years who knows their business could be double or triple what it is today.

Global Operations

Renewable Operations Sept 19

(Source: Investor presentation Sept 2019)

Deployed Cash

(Source: Investor presentation Sept 2019)

As you can see from the two images Brookfield Renewable Partners has assets all over the world. They have really increased their spending over the last five years if you look at the second picture, they have increased their spending considerably from the prior five year period. I believe there is room for growth all over the world as countries look to move away from fossil fuels, by looking at both their global operations and where they have deployed their cash it looks like Asia, Europe and South America could present areas of growth for the company. With BEP’s relationship to its parent Brookfield Asset Management I don’t see a problem with acquisitions the cash will be there for them.

Renewable Energy

Renewable Tech

(Source: Investor presentation Sept 2019)

Currently BEP is invested in five areas of renewable technologies with Hydro and wind being the two biggest.

Distributions

BEP Distributions

BEP has been increasing its distribution for a few years now, their targeted distribution growth is between 5 to 9%. I don’t see growth stopping anytime soon, I expect as the company gets bigger the distributions may get higher possibly. BEP currently pays a quarterly distribution of $0.5425 USD.

The Purchase

I made the purchase on Thursday January 16th, at that time the stock was much closer to its 52 week high than its low. Being that high doesn’t really concern me I belief BEP is a solid company with a bright future. According to my investing platform BEP has had a 37% return over the last year which is very impressive. If we see some pullback in the near term I will add to my position and average down.

I purchased 21 shares at a cost of $61.25 per share. As mentioned above this purchase was made it my TFSA account. I should receive $11.39 USD quarterly when converted into Canadian currency at today’s rate I should receive about $14.96.

Well folks what do you think of my purchase? Do you own Brookfield Renewable Partners? Please feel free to leave a comment.

Come back on Monday I will share with you another addition I made to my portfolio.

Thanks for reading

Matthew

 

24 thoughts on “First Stock Purchase of 2020

  1. Hey Matthew,

    That’s a great addition to your portfolio and TFSA to be more specific. With the focus on climate change, reconsidering our dependence on fossil fuels and moving towards more sustainable solutions is critical.

    Best,
    DGX Capital

    Liked by 1 person

  2. I bought BEP about 14 months ago and I am up about 68%. It has had quite a run up and is part of the Brookfield dynasty which drew me to it. My only regret is only buying 100 shares at $27. Ah well…I am holding it for the longhaul.

    Liked by 1 person

  3. I own a small position in BAM and BIP and wouldn’t mind adding BEP into the mix either. Although considering I don’t think it’s a steal right now I think I’ll wait for better opportunities or for the unit conversion before diving in. Great company and a top notch management team.

    Liked by 1 person

    1. Hi Steve I don’t believe they are I’m not 100% sure though. It is my belief that as long as you hold BEP on the TSX and not on the US stock market you should be good on the tax front.

      Like

      1. Hey DGX perfect timing I have a question for you. Did you subscribe to see my comments? I currently have someone having an email problem, just wondering how you see and respond to the comments on my site.

        Like

      2. Yup I subscribe to comment replies when I post and I get an e-mail notification saying there is a new comment on the post and there an option to reply within the email which leaks to the post directly 😁

        Like

      3. Hey DGX I think your tech savvy I was wondering if you had the time could you click on my post My Financial Goals for 2020 and reading the comments to see if we could help Beth? Thanks

        Like

  4. Matt I do like the company, But I think it is overvalued at the current price. P/E is 152, dividend payout ratio is 653% which is not sustainable over the long term and it looks like there is not going to be a big increase in earning in the near future. I like Warren Buffets reasoning for companies like these. Buy good companies at a good price. I just don’t think today is a good price to be buying BEP. Good luck though. I’ll be watching from the sidelines.

    Liked by 1 person

    1. My guess is that maybe she’s checking off the box that ask to be notified of every comment everytime she replies to a comment. Meaning multiple replies might be leading to multiple requests if that box is always checked off for each reply.

      Liked by 1 person

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