Brookfield Renewable (BEP -1.60%) (BEPC -1.73%) has been a wealth-creating machine over the years. The renewable energy producer has generated a remarkable 18% total annualized return since its inception nearly 20 years ago, obliterating the S&P 500, which produced a 6% total annualized return during that timeframe. Powering Brookfield's impressive outperformance has been its ability to consistently grow its renewable energy portfolio, cash flow, and high-yielding dividend. 

While past success is no guarantee of future performance, Brookfield should have plenty of power to continue generating above-average total returns. That's why it's my largest renewable energy holding and the top stock in the sector that I'd buy right now.

Wind turbines at sunset by the shore.

Image source: Getty Images.

Taking things up another notch

Brookfield Renewable has grown steadily over the years by expanding its portfolio of cash-flowing renewable energy assets via acquisition and development projects. It recently completed one of its largest deals as it acquired full control of TerraForm Power. That transaction created one of the largest, integrated pure-play renewable power producers in the world. It was also immediately accretive to its cash flow and will enhance its growth prospects. 

Meanwhile, it has also steadily added more renewable energy development projects to its portfolio. In July, it agreed to acquire a massive solar development project in Brazil. It's one of the world's largest solar projects and will require a $200 million equity investment to bring it to completion, which should happen by early 2023. That project is just one of many in the company's 15-gigawatt (GW) development pipeline, which implies a sizable amount of growth given its current 19.3 GW operating portfolio. 

A fully powered growth plan

Brookfield's five-year growth strategy currently contemplates building roughly 1 GW of new renewable projects, which would support 3% to 5% earnings growth. It will likely construct additional projects to monetize, allowing it to maintain a strong balance sheet and bolster its investment returns. Meanwhile, the company believes it can generate another 3% to 5% in annual earnings growth thanks to additional drivers like embedded contractual rate increases, recontracting expiring power sales agreements at higher prices, and cost reductions. Add that organic growth to the company's 4.3%-yielding dividend, -- which it expects to grow at a 5% to 9% annual pace -- and it could produce total returns in the range of 10% to 14% per year.

However, there's upside to that plan as Brookfield completes additional acquisitions, which it believes could add another 3% to 5% per year to its earnings growth rate. The company has plenty of ways to finance deals, including using its top-notch balance sheet, selling assets and recycling the capital into higher returning opportunities, and issuing more equity in the right circumstances (like its deal to buy the rest of TerraForm). Given its acquisition track record, future transactions could help continue moving the needle for the company and its investors.

At the top of its class

Brookfield Renewable solidified its position as one of the world's largest renewable energy producers thanks to its recent merger with TerraForm Power. It also has one of the best balance sheets in the sector and one of the largest expansion project backlogs. It therefore has plenty of power to keep growing its portfolio, cash flow, and dividend. Those growth drivers growth have fueled strong total returns in the past and should continue to power them in the future. That's why it still sits at the top of my list as the best renewable energy stock to buy these days.