Renewable energy stocks were supposed to be some of the losers under the second Trump administration. The president is famously not a fan of wind turbines or solar energy. Yet one diversified energy play is having an outstanding year.
Shares of Brookfield Renewable Partners (BEP 0.13%) have soared by 37.5% year to date through May. Here's a look at several reasons investors shouldn't overlook Brookfield Renewable Partners, but also one reason to be wary.
Image source: The Motley Fool.
Brookfield is diversified
Brookfield Renewable's underlying business is one of the reasons the stock has performed well so far this year. The company continued its trend of growing funds from operations (FFO), with a 19% year-over-year increase in Q1. The financial measure, commonly used by real estate investment trusts (REITs), defines cash generated from underlying operations and has increased by 12% over the last year versus the prior period.
Connor Teskey, CEO of Brookfield Renewable and president of Brookfield Asset Management, summarized the company's recent success this way:
Growing energy demand is now occurring alongside a renewed focus on energy security. In an environment with strong demand for low-cost, quick-to-market, and increasingly locally sourced energy, we are well positioned to deliver sustainable, long-term cash flow growth for our investors.
Brookfield was poised to capitalize on the growing demand, thanks to its diversification across energy markets and technologies. While a little over half of its assets under management are in North America, the company also has meaningful energy assets in Europe, Latin America, and across the Asia-Pacific region.
NYSE: BEP
Key Data Points
Power production assets are in demand as data centers increase global energy demand and the Strait of Hormuz conflict rattles oil markets. It highlights where Brookfield's expertise makes a difference. The company is a strong capital allocator, and management constantly works to identify its best opportunities. In that vein, Brookfield Renewable announced $3 billion in asset sales in Q1 alone as it recycles capital into projects it believes offer better returns.
BEP or BEPC?
The equity is also unique. Brookfield Renewable offers partnership units, but investors can also purchase shares of Brookfield Renewable Corp. (BEPC 0.50%). BEP units and BEPC shares both represent the same underlying business and assets. The former is a limited partnership, while the latter is a corporation.
Owning shares in the partnership can lead to more complex tax paperwork, which turns off some investors. That helps explain the recent pricing deviation. Although they pay the same dividend amount per share/unit, their market prices diverged, resulting in different yields.
Data by YCharts.
The partnership units have been playing catch-up this year, resulting in the outsize return. Investors can choose which to buy based on personal situations and tax preparation concerns. But there is no doubt that the underlying business is strong, and Brookfield is a solid renewable energy dividend stock to own. Just don't expect the pace of returns to mirror what we've seen so far in 2026, as the partnership unit price has now closed the gap.
