Brookfield Renewable Partners (BEP 1.63%) offers one of the best ways to get exposure to the renewable energy. The company owns a wide range of green energy facilities and is targeting returns of 12%-15%.
In this segment of "The 5," recorded on Nov. 23, Fool contributors Jeremy Bowman and Jason Hall discuss why Brookfield Renewable is so appealing in an environment with high oil prices.
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Jason Hall: One of the other big things that's affecting the global economy, thinking about inflation is oil prices. Oil prices, oil capacity is getting strained. Prices at the pump --whoa, buddy. I know we all, as people that work on the Internet and meet on the Internet, we don't have to drive as much as a lot of people do. But we have a kid that we have to take to the preschool and man I hate stopping at the pump.
But here's the thing, the Biden administration just announced it's going to release about 50 million barrels of oil from the SPR, the Strategic Petroleum Reserve. The idea is to help alleviate some of the pressure on oil supply and prices. This is a follow-up to Congress releasing some oil not too awful long ago. It's happening in concert with other countries that have strategic oil reserves that are doing the same thing to help. It's a little bit of salve here for the global oil market.
Here's the thing, here's a crazy statistic. 50 million barrels, that sounds like a ton of oil. Right, guys? But based on 2020 consumption, so 2019 consumption probably will be a little bit better going to look at it compared to where we are now. But that is about 2.75 days of U.S. oil products consumption. I mean, that's not even a holiday weekend, guys. It's nothing. I didn't want to talk too much about the macro world of oil and all the levers and want to make you guys pick oil stocks or anything like that because that's not fun. But what I did want to do is challenge you guys to think broadly about the energy industry. Again, not oil and gas stocks, maybe not even a renewable energy company but broadly, thinking about the energy industry, what's your favorite stock that you love to own, Jeremy?
Jeremy Bowman: Yeah. I mean, I think this news for me, it underscores the fact that we're still really dependent on oil and gas and you don't even think about a lot of the geopolitical factors that come into play and the fact that we even need to have a strategic petroleum reserve says a lot. I think this news and higher prices at the pump is good for renewable energy, and it's a reminder that we want to be investing in those resources and that's a growth market. For me, the stock I chose is Brookfield Renewable Partners. This is a base level green infrastructure play at a wide range of renewable facilities, everything, wind, solar, hydro, geothermal, I don't know whatever else. It's a good way to get diversification if you're looking to add some green energy to your portfolio, they're targeting 12-15% returns annually over the long term, which is great. They pay a dividend. I think they are a pretty good choice, especially in an expensive fossil fuel market.
Jason Hall: Jeremy, just makes me happy when somebody else's on here that brings up a Brookfield company.
Jeremy Bowman: I know you're a big fan.
Jason Hall: I am the number 1 fan, but just the strength of this company and their ability to effectively allocate capital, manage through the cycles, buy when they can buy on the cheap, develop and grow the assets, grow that dividend 8-10 percent every year without fail, they are doing that and crush the market for investors. I love this company. Thank you, Jeremy. I'll pay you later for bringing it up.