Brookfield Renewable Partners (BEP -0.32%) is a leading renewable energy provider that has delivered stellar returns for investors over the past decade. The company did a solid job of building out its business, which has helped it maintain cash flows as well as provide steady dividend growth to investors.
But how does that translate into investment returns? Let's determine how much a $1,000 investment in Brookfield Renewable Partners 10 years ago would be worth today. And because past performance isn't necessarily an indicator of future performance, let's also try to determine if it's a solid stock to invest in going forward.
Brookfield Renewable is a huge player in renewable energy
Brookfield Renewable Partners operates one of the largest publicly traded platforms for renewable energy and decarbonization solutions. The partnership owns assets across various renewable energy products, including hydroelectric, wind, solar, and other sustainable energy sources.
Brookfield Renewable sells electricity to public power authorities, utilities, and global businesses through long-term, inflation-linked contracts. Thanks to the steady demand for renewable energy and its long-term contracts, Brookfield Renewable has been an excellent source of cash flows and dividends for investors.
Following its annual earnings last year, it announced a $1.35 distribution per unit to shareholders -- representing a 5.5% increase from the prior year. More impressive is that this was its 12th consecutive year of 5% or more growth in its annual distribution since it went public in 2012.
Image source: Brookfield Renewable Partners.
If you invested $1,000 in Brookfield Renewable Partners 10 years ago, you'd have this much today
Brookfield Renewable did an excellent job of building out its renewable energy investments and growing its distribution to shareholders, who were rewarded for their patience.
If you invested $1,000 in Brookfield Renewable Partners in 2013, your investment, with distributions reinvested, would be worth $3,768 today. That's a 277% return over that decade. This growth outpaced the broader S&P 500, where a $1,000 investment in the SPDR S&P 500 ETF in that same period would be worth $3,168 (a 217% return).
BEP Total Return Level data by YCharts
Brookfield Renewable's massive opportunity
Brookfield Partners is a crucial player in the renewable energy space and figures to play a prominent role in the industry. According to the International Energy Agency, to reach net zero emissions by 2050, investments in clean energy across the globe would need to triple by 2030 to $4 trillion.
This is a staggering amount and is a massive opportunity for Brookfield Partners. Last year the partnership closed on or agreed to invest up to $12 billion over the next five years across all decarbonization efforts, including wind, nuclear, battery storage, and other transitional investments.
Image source: Getty Images.
Well positioned for further growth
Brookfield Partners management believes the company can achieve 10%-plus annual growth in its funds-from-operations (FFO) through at least 2027 by using a few different levers. For one, the inflation escalation in its contracts should contribute up to three percentage points of this growth. Another 3-5 percentage points of growth will come from its development pipeline, where it plans to increase its capacity to 110,000 megawatts -- a big increase from its 25,000 megawatts of operational capacity today. Now add in future mergers and acquisitions, which could potentially contribute another nine percentage points of growth in FFO by 2027.
Brookfield Partners is a key player in helping reach net-zero emissions goals, and its development pipeline should support further growth in the coming years -- making this energy company a solid stock to buy and hold for the long haul.
