Brookfield Renewable Partners (BEP 0.07%) is having another strong year both operationally and financially. Through the third quarter, the company's cash flow has increased by more than 30% after adjusting for foreign exchange fluctuations and some other issues. One factor powering the company's growth is the acquisitions of sizable stakes in both TerraForm Power (TERP) and its sibling TerraForm Global.

However, despite that strong year, the renewable power company has lost 20% of its value, which has pushed its dividend yield up to 7%. That lower price was an opportunity I couldn't pass up, which is why I recently boosted my position in the renewable power company.

Wind turbines in a green field with the sun setting in the background.

Image source: Getty Images.

A rock-solid income stock

One of the driving factors of my decision to invest more money into Brookfield Renewable Partners is that it pays such an attractive dividend. Not only is the payout well above average, but it's on solid ground. That's because Brookfield Renewable shares all the characteristics found in the best high-yield dividend stocks, since it not only generates stable cash flow but has a comfortable payout ratio and a strong balance sheet backed by a low leverage ratio and ample liquidity.

Brookfield sells more than 90% of the power it produces under long-term contracts, which provides it with very predictable cash flow. Meanwhile, it currently distributes about 87% of that money to investors. While that's a lower rate than many of its peers, it's above the company's target to pay out less than 80% of its cash flow, which it expects to achieve in the future. The reason its currently elevated payout ratio isn't a concern is that the company has a top-notch balance sheet with ample liquidity. The company is in the process of selling about $850 million of noncore assets, which will boost its liquidity to $2.3 billion, giving it ample dry powder to invest in building or buying additional renewable power assets.

A great company for a fair price

Another reason why I like Brookfield Renewable Partners these days is its low valuation. The company is currently on pace to generate about $2.40 per unit in annualized cash flow, which is up more than 25% from 2017's level. With the company shedding 20% of its value in the past year, it currently trades at around 11.5 times cash flow. That's a reasonable level for a company with such a strong financial profile and growth prospects.

A calculator and pen on top of $100 bills.

Image source: Getty Images.

Lots of growth in the decades ahead

Speaking of growth, Brookfield currently anticipates that it can increase its cash flow per unit at a 6% to 11% annual rate through at least 2022. Three factors drive that outlook:

  1. Inflation-driven contractual rate increases should boost its bottom line by 1% to 2% annually.
  2. Margin expansion as the company reduces costs -- especially at TerraForm Power -- should boost earnings by another 2% to 4% per year.
  3. The company has a large slate of development projects underway, including wind farms in Europe, Colombia, and Brazil, as well as small hydro facilities in Brazil that should power another 3% to 5% annual increase in cash flow per share.

This organic growth alone should be enough to enable Brookfield to deliver 5% to 9% annual distribution increases to its investors.

In addition to that, Brookfield has a knack for making value-enhancing acquisitions. As mentioned, it recently invested in TerraForm Power, which has not only helped propel cash flow but added a solar power platform to the company's operations. With a significant level of liquidity, the company has the buying power to continue making smart acquisitions, which could enable it to grow cash flow at an even faster rate in the future. The company anticipates that it can invest $700 million to $800 million per year to expand its business and shouldn't have any shortage of investment options given the massive size of the global renewable energy market opportunity.

Everything I like to see in an investment

Brookfield Renewable Partners checks all the boxes for me. It pays an above-average dividend that's on rock-solid ground, it sells for a relatively attractive price, and the company has ample growth ahead of it. That's why I recently added to my position and will likely continue doing so if it keeps getting cheaper.