The Smartest Dividend Stock to Buy With $31 Right Now

Often, when a stock's dividend yield rises above 4%, that's a red flag. That's not the case with Brookfield Renewable Partners (NYSE: BEP), though, despite its forward yield of nearly 5% at its current share price of about $31. That's more than four times the S&P 500's average yield.

As its name implies, the company's focus is on renewable energy, everything from wind, hydroelectric, and solar to nuclear energy through its partnership with Westinghouse. Brookfield is capable of supplying 250 gigawatts of electricity.

However, rising demand due to both broader economic growth and the expansion of data centers and manufacturing means that the nation's electricity needs are expected to grow by between 35% and 50% through 2040, according to a 2025 report by S&P Global. Brookfield already has partnerships to supply power to Microsoft and Alphabet, two big drivers of growing electricity demand in the U.S. as they further expand their massive cloud computing operations.

There are growing corporate and governmental pushes across the globe to shift to renewable energy sources, and Brookfield Renewable, a 24-year veteran of the green energy sector, is well placed to take advantage of that megatrend.

What's the difference between Brookfield Renewable Partners and Brookfield Renewable Corporation?

Brookfield Renewable trades under two stock tickers, which can confuse some investors. It created a clone of itself, Brookfield Renewable Corporation (NYSE: BEPC), in 2020. The two entities are the same company, share the same assets, and even pay the same dividend per share. The difference is that investors in Brookfield Renewable Partners units may need to file a Schedule K-1 at tax time to report their dividend income from the company because it is a limited partnership. Those who receive dividend payments from Brookfield Renewable Corporation stock can report those with the simpler (and much more commonly used) Form 1099.

Brookfield Renewable Corporation's shares are generally more expensive because they are in greater demand, simply because index funds and ETFs often have rules that exclude partnerships from their portfolios. They can, however, buy shares of Brookfield Renewable Corporation. This means that its dividend yield is usually lower, even though it is the same company.

In 2025, Brookfield Renewable Partners reported $1.3 billion in funds from operations (FFO), up 13.8%, and FFO per share of $0.52, an increase of 10.8%.

Management says that it expects to increase its FFO per unit by 10% annually while raising dividends by 5% to 9% each year.

Brookfield operates in North America, South America, Europe, Asia, and Australia, so it has geographic diversity to go along with the breadth of its various green energy solutions.

Investors see the stock as one with growth possibilities. Its shares are up more than 14% so far in 2026 and up more than 37% over the past year.

How solid is Brookfield Renewable's dividend?

Brookfield Renewable has increased its dividend payouts for five consecutive years, including a 5% boost this year to $0.392. That was a total increase of 27%. However, in that period, its FFO per share rose by 114%, giving it plenty of flexibility for further payout increases.

Brookfield Renewable's contracts are long term, averaging 13 years. Long-term power purchasing agreements account for 90% of its electricity sales. The company has steady cash flows, and 70% of those agreements include terms that adjust for inflation, so even if its costs rise, Brookfield's FFO will increase as well.

At first glance, its FFO payout ratio of 75% seems a bit high, but the company has steady growth built in. Its dividend payouts per share have grown at a compound annual rate of 6% over the past decade, but its FFO per share has risen at an 8% compound annual rate over that same period.

James Halley has positions in Alphabet, Brookfield Renewable, Brookfield Renewable Partners, and Microsoft. The Motley Fool has positions in and recommends Alphabet and Microsoft. The Motley Fool recommends Brookfield Renewable and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.