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Brookfield Renewable Boosts Dividend by 5% After a Bumper 2020

By Neha Chamaria - Feb 4, 2021 at 12:00PM

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The renewable energy company's pipeline is growing rapidly.

Brookfield Renewable Partners (BEP 3.25%) (BEPC 3.72%) reported its fourth-quarter and 2020 results Thursday morning, and it didn't disappoint. While delivering record results for the year, the renewable energy company has also given income investors a reason to cheer: a 5% increase in its dividend.

Here's a quick look at Brookfield Renewable's key fourth-quarter and 2020 numbers.

Metric Q4 2020 Q4 2019 Change  FY 2020 FY 2019 Change 
Power generation 6,583 GWh 5,977 GWh 10.1% 26,052 GWh 26,038 GWh --
Normalized funds from operations (FFO) $265 million $167 million 58.7% $924 million $725 million 27.5%
FFO per unit $0.41 $0.28 46.4% $1.52 $1.24 22.6%

GWh = gigawatt hours. Data source: Brookfield Renewable Partners.

In the company's earnings press release, CEO Connor Teskey said: "2020 was another year of significant growth for our business. Despite the economic challenges around the world, we delivered record results and continued to broaden our operations, as we look forward to a multi-decade opportunity to advance decarbonization and assist with the transition of global electricity grids to a more sustainable future."

Solar panels and windmills on a farm.

Image source: Getty Images.

Thanks to higher power generation buoyed by organic growth and acquisitions, Brookfield Renewable's normalized funds from operation (FFO) per unit jumped nearly 23% in 2020. While the company's hydropower generation was in line with its long-term average rate, its wind and solar segments reported 51% growth in FFO during the year thanks to acquisitions like that of TerraForm Power.

In December, Brookfield Renewable also struck a deal to acquire Exelon's (EXC 1.43%) distributed solar energy business for roughly $810 million in a deal expected to close in the coming months. 

Brookfield's development pipeline now stands at 23,000 megawatts, which is a significant improvement over the 13,000 megawatts from a year ago.

The company also ended 2020 with a strong balance sheet, with liquidity of nearly $3.3 billion and no material debt maturing in five years.

Encouraged by strong FFO growth and in keeping with management's long-term target of 5% to 9% annual dividend growth, Brookfield Renewable announced a 5% increase in its dividend, which translates into an annual $1.215 per unit. That's a nice boost for a stock now yielding 2.5%.

Brookfield Renewable's significant pipeline growth and dividend increase come at a time when renewable energy has become the talk of the town, with President Joe Biden proposing a $2 trillion climate plan emphasizing clean energy. For investors, that should only add to the stock's appeal.

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Stocks Mentioned

Brookfield Renewable Partners L.P. Stock Quote
Brookfield Renewable Partners L.P.
BEP
$34.66 (3.25%) $1.09
Exelon Corporation Stock Quote
Exelon Corporation
EXC
$47.54 (1.43%) $0.67
Brookfield Renewable Corporation Inc. Stock Quote
Brookfield Renewable Corporation Inc.
BEPC
$35.45 (3.72%) $1.27

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