Please ensure Javascript is enabled for purposes of website accessibility

Why Brookfield Renewable Partners Stock Popped Friday

By Howard Smith - May 14, 2021 at 4:08PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A strong earnings report wasn't reflected in the stock -- until today.

What happened

Brookfield Renewable Partners (BEP 0.36%) had a good year in 2020, and its stock price reflected that, rising about 75% for the year. But investors rotated out of alternative energy names in 2021, and Brookfield Renewable was no exception. Shares are down more than 20% in just the last three months. But the company reported strong earnings last week, and with market sentiment behind more renewable energy names today, shares jumped more than 5% as of 3:30 p.m EDT.

So what

Last week, Brookfield Renewable reported funds from operations (FFO) -- a widely accepted measure of cash generation for asset-heavy businesses -- grew 21% in the first quarter of 2021 compared to the prior-year period.

offshore wind turbines

Image source: Getty Images.

In the first quarter, Brookfield also said it invested or agreed to invest about $400 million of its own equity in transactions for onshore and offshore wind, utility scale solar, and generation assets in the United States, Europe, and India. As general market sentiment is warming back in the sector, Brookfield shares are regaining investor interest today.

Now what

The Biden administration has said it has a goal of creating 30 gigawatts (GW) of U.S. offshore wind capacity by 2030. It took a step toward that this week, when the U.S. Department of the Interior approved the first large-scale offshore wind project in the U.S. 

Brookfield Renewable is ready to take part in that growth. In its first-quarter release, it offered some background on the offshore segment, stating: "For the past several years, we monitored the offshore wind sector, while not investing. But as the technology has grown and matured, we have become more comfortable."

The company told investors that in the first quarter, it closed its first offshore wind investment, which it said includes a pipeline of projects to build 3 GW of capacity it feels is "supported by an attractive contract structure, over the next several years." Investors seem to be recognizing the growth potential after the stock retrenched prior to today. 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Brookfield Renewable Partners L.P. Stock Quote
Brookfield Renewable Partners L.P.
$39.31 (0.36%) $0.14

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/16/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.