What Has Brookfield Renewable (BEPC) Stock Done For Investors?
Key Points
Brookfield Renewable has grown its earnings at a solid rate over the past five years.
It traded at a premium valuation in the initial aftermath of the pandemic.
Its lofty valuation has impacted its returns.
- 10 stocks we like better than Brookfield Renewable ›
Brookfield Renewable (NYSE: BEPC)(NYSE: BEP) is one of the world's largest publicly traded renewable power platforms. Its global operations encompass hydroelectric, wind, solar, and energy storage. It also has an emerging sustainable solutions platform.
Here's a look at how the renewable energy stock has performed compared to the S&P 500 over the last five years.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Image source: Getty Images.
Brookfield's five-year returns
Brookfield Renewable has been a surprisingly poor performer over the last five years:
|
One-year |
Three-year |
Five-year |
|
|---|---|---|---|
|
Brookfield Renewable |
26.8% |
23% |
-18% |
|
Brookfield Renewable (total return with reinvested dividends) |
31.6% |
40.4% |
-0.1% |
|
S&P 500 |
13.4% |
68.4% |
87.1% |
Data source: Ycharts.
Shares of the renewable energy producer have lost value over the past five years, even when adding in its lucrative dividend (3.7% current yield). It has also underperformed the market over the last three years. However, it has started to regain some momentum over the past year, as its returns have surpassed those of the S&P 500.
What has contributed to Brookfield's five-year performance?
While Brookfield Renewable's share price has fallen over the past five years, its business has performed well. In 2020, the company generated $807 million or $1.32 per share of funds from operations (FFO). This year, the company is on track to produce nearly $1.3 billion or $1.91 per share of FFO. That implies compound annual growth rates of 11% and 8%, respectively. Brookfield has also increased its dividend payment from $1.16 per share to $1.49 per share, a 6% compound annual growth rate.
Given those results, the culprit behind the company's poor performance seems to be related to its valuation. Five years ago, Brookfield traded at around $49 per share or about 37 times FFO. Today, it trades at roughly $40 a share, or almost 21 times FFO. Like many stocks, the company was trading at a relatively high valuation in the aftermath of the pandemic.
However, Brookfield trades at a much more reasonable valuation these days, especially given the growth it sees ahead. Surging demand for renewable energy due to AI data centers and other catalysts helps power the company's forecast that it can deliver more than 10% annual FFO per share growth through 2030. That easily supports its plans to increase its dividend within its 5% to 9% yearly target range.
Valuation matters
Brookfield Renewable fetched a premium valuation five years ago. As a result, shares have significantly underperformed the S&P 500 as the company didn't grow its earnings fast enough to justify that value.
However, it trades at a much lower valuation today. With its earnings-per-share growth rate poised to accelerate, it could produce much more powerful total returns over the next five years.
Should you invest $1,000 in Brookfield Renewable right now?
Before you buy stock in Brookfield Renewable, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Brookfield Renewable wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $556,658!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,124,157!*
Now, it’s worth noting Stock Advisor’s total average return is 1,001% — a market-crushing outperformance compared to 194% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of December 1, 2025
Matt DiLallo has positions in Brookfield Renewable and Brookfield Renewable Partners. The Motley Fool recommends Brookfield Renewable and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.
Recommended Articles
