Brookfield Renewable Partners (NYSE:BEP) has shed about 12% of its value this year, which is a bit of a head-scratcher since the company has gotten off to an excellent start. Not only did it post strong numbers to end 2017 and solid results in 2018's first quarter, but it increased its distribution to investors another 5% and boosted its stake in another renewable power company. Because of that disconnect, Brookfield tops my list of renewable energy stocks that I'd buy right now.

A top-notch income stream

Brookfield Renewable Partners is one of the largest renewable power generating companies in the world. Overall, it owns more than 800 facilities with the capacity to produce 16,300 megawatts of power, which is enough to meet the needs of around 10 million homes. While the company has a diversified portfolio of hydroelectric, wind, and solar generating facilities, hydro is by far the largest contributor at 82% of the total.

Solar panels under a blue sky at sunset.

Image source: Getty Images.

Brookfield currently sells about 92% of the power it generates under long-term contracts, providing the company with very stable cash flow. Meanwhile, it distributes roughly 70% of that money to investors each year, which gives it plenty of excess cash to invest in expansion projects. Finally, Brookfield has an excellent balance sheet, including an investment-grade credit rating backed by conservative financial metrics.

These factors put Brookfield's distribution to investors -- which now yields 6.4% after this year's sell-off and 5% raise -- on as firm a foundation as investors will find, which increases the likelihood that the company can maintain it throughout the market's inevitable ups and downs.

Visible growth up ahead

Brookfield's aim, however, isn't to maintain the status quo but to grow cash flow and its distribution to investors at a steady pace. Currently, the company believes it can organically grow cash flow 6% to 11% each year, which would support 5% to 9% annual distribution growth. Several factors support this view.

First, Brookfield's contracts have inflation escalators embedded into them that should boost its bottom line by 1% to 2% each year. Second, the company expects that its margin expansion efforts will drive 2% to 4% annual cash flow growth as it secures higher rates when legacy power contracts come up for renewal, and it reduces costs across its portfolio through optimization and streamlining operations. Finally, Brookfield has a large backlog of wind, hydro, and energy storage projects under construction and in development, which should support 3% to 5% annual cash flow growth.

In addition to the embedded growth within its existing portfolio, Brookfield Renewable has the potential to continue making acquisitions to power an even faster growth rate. Brookfield has a long history of making needle-moving deals, including closing several in the last year. In October, it invested $203 million to acquire a 16% stake in wind and solar company TerraForm Power (NASDAQ:TERP). It followed that up by spending $230 million for a 31% interest in TerraForm Global in December and then boosting its stake in TerraForm Power up to 31% this summer by investing another $217 million into that company.

With $1.4 billion in liquidity remaining after making these investments, the company has ample firepower to continue expanding its reach. Overall, Brookfield wants to invest $600 million to $700 million per year to add high-quality renewable assets to its portfolio. If the company can continue finding needle-moving deals, they could give it the power to grow cash flow and its distribution at an accelerated pace.

Income and growth, now for a much lower price

There's a lot to like about Brookfield Renewable Partners these days. Not only does it pay investors a lucrative income stream generated by renewable power, but it's on pace to grow that payout at a healthy rate over the coming years. Add in the fact that investors can now get this top-tier renewable company for a lower price, and it's one stock I wouldn't hesitate to buy right now.

Matthew DiLallo owns shares of Brookfield Renewable Energy Partners and TerraForm Power. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.