The last five years have shown that not all energy dividends are what they seem. When crude oil prices plunged in 2014, companies from upstream to downstream to midstream cut their dividends, showing just how dependent every player in the oil and natural gas sector can be on underlying commodity prices. 

In the once reliable utility market, there's been upheaval as well. Wholesale energy markets are collapsing because the low cost of wind and solar power is sucking demand away from formerly lucrative peaker power plants. Regulated utilities are even losing customers to rooftop solar, a threat they hadn't seen until the past decade. 

The one area of this sector that seems guaranteed to grow over the next decade is renewable energy. There have been a lot of horror stories from investing in renewables over the past decade, but I think these three renewable energy dividend stocks will generate value for investors for many years to come. 

Solar farm with wind turbine in the background.

Image source: Getty Images.

Brookfield Renewable Partners

Brookfield Renewable Partners (NYSE:BEP) is an arm of Brookfield Asset Management (NYSE:BAM). The company owns primarily hydroelectric plants, and has assets in North America, Latin America, and Europe. Its business model is a little different from that of newer yieldcos because it aims to grow organically. Management plans to grow the dividend just 5% to 9% each year, keeping 15% to 20% of cash flow to fund future expansion. 

Part of its expansion plan last year involved acquiring 100% of TerraForm Global (with support from some institutional investors), as well as a controlling interest in TerraForm Power (NASDAQ:TERP). The transaction diversifies Brookfield Renewable Partners into more wind and solar, as well as giving it entry into Asia and more Latin American markets.  

With a long-term history of prudent asset allocation, Brookfield Renewable Partners is poised to be a dividend winner long term, and its current dividend yield of 6% is a strong place to start for investors. 

TerraForm Power

Brookfield Renewable Partners owns a controlling interest in TerraForm Power, but it's also a public company you can invest in. TerraForm Power owns 2,606 MW of wind and solar projects in the U.S., Canada, Chile, and the U.K., and has a $1.2 billion offer in to buy another 1,028 MW of projects in Spain

The company has gone from being on the brink of collapse to arguably one of the best-positioned yieldcos today. It has a low cost of capital, partly because it's backed by Brookfield, and the opportunity to grow now that it's keeping 15% to 20% of its cash available for distribution to fund acquisitions. Its payouts to investors are yielding 6.6% now, and with long-term growth expected to be in the 5% to 8% range annually, this is another rock-solid dividend. 

NextEra Energy Partners

One of the best growth yieldcos today is NextEra Energy Partners (NYSE:NEP), an arm of NextEra Energy (NYSE:NEE). The company owns about 3,700 MW of renewable energy assets that have an average of 18 years left on their power purchase agreements with utilities. That ensures cash flow that can be used to pay dividends long term. 

One way NextEra Energy Partners differs from TerraForm Power or Brookfield Renewable Partners is in its growth plans. The company has set a goal of 12% to 15% annual dividend growth between 2017 and 2022, and that will require a lot of new asset acquisitions. What the yieldco has going for it is a low dividend yield of 3.9%, which lowers its cost of capital, and a pipeline of projects coming from NextEra Energy. 

At the midpoint of 2018's dividend guidance of $1.835 per share, the stock's yield will be 4.6%, but if it hits 15% dividend growth through 2022, the forward yield is a much more impressive 8%, with additional potential growth ahead. That's the kind of yield that income investors should love, especially given that the business has nearly two decades worth of contracts to back it up. 

Yieldcos have become the best energy dividends

Risks have increased in many parts of the energy sector, but those renewable energy companies that buy and own projects long term should be relatively stable dividend payers. Contracts to sell energy usually last for 20 years or more, and the electricity production of renewable energy plants is very predictable. Put those factors together and you have dividends that are built to last, which is why Brookfield Renewable Partners, TerraForm Power, and NextEra Energy Partners are my top energy dividend stocks -- and why I've given all three outperform calls on MyCAPS page

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.