Coming into this year, Brookfield Renewable (BEP -1.75%) (BEPC -1.96%) had already secured and funded enough growth drivers to increase its funds from operations (FFO) per share by at least 8% annually through 2027. However, that didn't stop the renewable energy behemoth from putting the peddle to the proverbial metal and securing new opportunities.

The company recently unveiled its latest deal, agreeing to buy Duke Energy's (DUK -2.25%) commercial renewable energy business for $2.8 billion. The acquisition will boost its bottom line by another 3% next year alone. That will give the decarbonization leader even more power to continue growing its attractive 4%-yielding dividend. 

Details on the deal

Brookfield Renewable and its partners have agreed to buy Duke Energy Renewables. The Brookfield group will pay $1.05 billion in equity (including $265 million funded by Brookfield Renewable), putting the businesses' enterprise value at $2.8 billion, including non-controlling tax equity interests and the assumption of debt. The sale will enable Duke Energy to strengthen its balance sheet, giving it additional flexibility to fund its investments to enhance grid reliability and incorporate the 30 GW of renewables it's planning to add in support of its regulated electric utilities by 2035. 

Duke Energy Renewables is a fully integrated developer and operator of U.S. renewable power assets. It has 5.9 gigawatts (GW) of operating and under construction wind, utility-scale solar, and storage assets. It also has another 6.1 GW of renewable power projects under development. The deal will enhance Brookfield's position as one of the largest renewable energy operators in the country, with nearly 90 GW of operating and development assets. To put the scale of its business into perspective, it has enough emissions-free capacity in operations and under development in the U.S. to nearly offset Poland's annual emissions and power all of Canada's homes for one year.

Adding multiple growth drivers

Duke Energy Renewables generates and sells renewable energy to third parties under long-term contracts. It currently has contracts in place for about 90% of the power it produces, with an average remaining term of 13 years, meaning the entity's operating portfolio will generate steady cash flow for Brookfield. The company estimates that the deal will be immediately accretive and boost its FFO by at least 3% next year. 

In addition to that, the deal will supply the company with visible growth over the next several years as it completes construction on current projects. Meanwhile, it will enhance its longer-term growth as the company progresses the sizable development pipeline.

On top of all that, Brookfield has identified additional potential growth drivers it aims to pursue. It sees actionable, near-term synergies by capitalizing on opportunities to share costs across its existing business. It can also leverage its existing relationships with renewable energy buyers to secure new contracts for currently uncontracted capacity and future developments. Finally, the company sees significant optionality to repower the legacy wind energy assets by replacing existing turbines with larger, more powerful ones in the coming years.

Powerful growth ahead

With this deal, Brookfield Renewable has now secured $21 billion of investments over the past 18 months ($3.9 billion it will fund). That puts it significantly ahead of pace on its target to deploy $6 billion-$7+ billion in capital over the next several years. The company's success in securing new high-return investments increases the probability that it could grow FFO toward the high end of its long-term outlook of upwards of 20% annually through 2027.

Brookfield should have plenty of power to deliver on its target of growing its high-yielding dividend by 5% to 9% per year. That income and earnings growth combination should give the company the power to produce strong total returns, likely in the double digits. This high return potential makes Brookfield Renewable look like a very compelling stock to buy right now.