Brookfield Renewable (BEPC 0.81%) (BEP 0.92%) has been a great growth stock over the years. The renewable energy producer has grown its funds from operation (FFO) by an average of 10% per share each year over the last decade. Add in its steadily rising dividend, and Brookfield has generated 14% total annualized returns, outpacing the S&P 500's 13.3% total returns during that timeframe. 

Brookfield could grow even faster over the next decade. That makes it look like a great growth stock to buy these days, especially since its stock price has fallen 20% from its peak. 

Powerful growth ahead

Brookfield Renewable has four growth drivers that could power up to 20% annual FFO per share growth through at least 2027. These include:

  • Inflation escalation: Brookfield sells the bulk of the renewable energy it generates under long-term, fixed-rate power purchase agreements (PPA) to utilities and corporate buyers. Most of those contracts feature annual rate escalation clauses tied to inflation. These inflation-linked contracts should support 2% to 3% yearly FFO per share growth.
  • Margin enhancement: As Brookfield's legacy PPAs roll off, it can recontract that capacity at higher market rates. That should support another 2% to 4% growth in FFO per share each year.  
  • Development pipeline: Brookfield has a vast and growing pipeline of renewable energy and decarbonization projects under construction and development. The company estimates that these projects should support 3% to 5% annual FFO per share growth.
  • M&A activities: Brookfield has an extensive track record of making accretive acquisitions. The company estimates that M&A could add as much as 9% to its FFO per share year.   

Brookfield has already secured and funded the investments needed to grow its FFO per share by at least 8% annually over the next five years. The company currently has 19 gigawatts (GW) of projects under development and in its advanced stage pipeline. Those provide it with line-of-sight to generate $260 million of incremental annual FFO, a sizable increase for a company that has produced $780 million of FFO over the last nine months. They're part of a larger 100 GW pipeline of projects it has under development. 

The company has also secured opportunities to deploy $2.8 billion of capital across various clean energy technologies this year. Notable deals include the acquisition of Scout Clean Energy and Standard Solar. Scout has 1.2 GW of operating wind assets and a pipeline of over 22 GW of wind, solar, and storage development projects. Meanwhile, Standard Solar has 500 megawatts (MW) of operating and under construction solar projects with a nearly 2 GW pipeline of development projects. These deals showcase its ability to acquire assets to expand its earnings and growth prospects. 

Adding new power sources

Brookfield has also been busy enhancing its growth prospects this year. The company closed a $15 billion fund dedicated to the energy transition. That's giving it more capital to invest across a range of new opportunities that offer outsized growth potential. Brookfield agreed to acquire nuclear power service company Westinghouse, expanding its expertise into that zero-emissions power source. The company has also made three investments across the carbon capture, storage, and utilization space and invested in a recycling company. Those companies all have expansion projects underway that Brookfield is helping finance with the option to fund more developments in the future. 

Brookfield is also taking an active role in helping companies accelerate their energy transition. It recently offered to acquire Australian power producer Origin Energy to help that company speed up its move from coal to renewable energy. 

These energy transition investments provide additional avenues for Brookfield to grow. They increase the probability it could deliver FFO per share growth toward the higher end of its long-term forecast.

High growth on sale

Like many growth stocks, Brookfield's share price has fallen this year as investors weigh how rising interest rates might impact economic growth. However, the company has a significant amount of growth already lined up and funded. In addition, it has a growing list of compelling investment opportunities. Overall, the 20% decline in Brookfield looks like a great buying opportunity for those seeking a company with high growth potential.