Brookfield Renewable Partners (NYSE:BEP) has done an exceptional job creating value for its investors over the years. Since 1999, the renewable energy company has generated a 16% total annual return when adding its unit price appreciation to its high-yielding distribution.

However, as good as those past returns have been, those to come could be even better. That's because the company believes it has enough power sources to grow its cash flow per unit by as much as 16% annually over the next five years. Add in its 5%-yielding distribution, and the total returns could approach 20% per year.

A person drawing a chart on a green chalkboard of rising dollar signs.

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High-powered growth

Brookfield Renewable anticipates that four factors can power between 9% and 16% annual growth in its cash flow per unit through at least 2024. First, the company believes it can improve the profitability of its existing assets, which can grow its cash flow per unit by 3% and 6% annually. Inflation escalators on its current contracts will provide 1% to 2% of that growth. Meanwhile, margin enhancement activities such as cost-cutting moves and higher power prices will add another 2% to 4% to its bottom line each year.

In addition to that, Brookfield Renewable plans to invest $4 billion over the next five years on expansion-related initiatives. Organic expansions such as building new hydro, wind, solar, and storage facilities as well as repowering projects at some of its existing wind farms will help grow earnings by 3% to 5% per year. The company also believes it can complete enough acquisitions to add an incremental 3% to 5% per year to its bottom line.

The renewable energy company has a variety of available funding sources to help finance this growth. These include retained cash flow after paying its distribution, issuing new debt and preferred equity, and selling noncore assets.

While there is some risk to this outlook since acquisitions will play a key role, Brookfield has an excellent track record of making deals. In the last five years alone, it has invested $3.5 billion in several transactions. Among its notable deals is purchasing a stake in TerraForm Power and investing in TransAlta's hydroelectric portfolio in Alberta, Canada. It also formed a joint venture with a private equity fund to control Spanish solar power developer X-Eilo. In each case, the company leveraged its unique expertise to make a deal that few others could have completed. Because of that, it's able to earn higher investment returns, which enhances its ability to grow cash flow.

A steadily rising income stream

Brookfield's fast-paced cash flow growth in the coming years will enable the company to continue increasing its distribution to investors. In the company's view, it should be able to boost the payout by a 5% to 9% annual rate over the next several years. Given that its cash flow will grow at a faster pace than the distribution, Brookfield's payout will be on an increasingly stronger foundation. That's because the payout ratio will decline even as the distribution keeps climbing. As a result, the company's payout will become even less risky in the coming years.

It all adds up to a compelling opportunity

Brookfield Renewable Partners is confident that it can grow its cash flow per unit by a 9% to 16% annual rate over the next five years. Add in its 5%-yielding distribution, which it expects to increase at a 5% to 9% yearly rate, and this company appears as if it could have enough fuel to generate 20% total annual returns. That low-risk upside potential makes it an excellent stock to consider buying for the long haul.