Why I Just Bought More Shares of Brookfield Renewable (And Will Buy Even More if This Happens)

I just bought more shares of Brookfield Renewable (NYSE: BEPC)(NYSE: BEP) at a little less than $33 each. I just couldn't resist that price, which is about 25% below the recent high. Buying at that price enabled me to lock in a roughly 4.8% yield on a very high-quality dividend stock.

Here's why I like Brookfield Renewable at that price and what would drive me to buy even more shares.

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An absolute steal

Brookfield Renewable has generated $2.08 per share of funds from operations (FFO) over the last 12 months, up 11.8% compared to the year-ago period. That has the renewable energy stock trading at less than 16 times earnings. That's an absolute steal in the current environment where the S&P 500 is trading at more than 25 times earnings.

That low valuation is why Brookfield offers a dividend yield much higher than the S&P 500's 1.1%. Brookfield can easily afford its high-yielding payout, as its current annualized dividend of $1.57 per share is a comfortable 75% of its FFO. That's enabling Brookfield to retain meaningful cash (about $350 million annually) to reinvest in expanding its operations. That will support continued dividend growth. Brookfield has increased its payment by at least 5% each year since 2011, and expects to grow its payout at a 5% to 9% annual rate over the long term.

The trigger to continue adding

I already hold a meaningful position in Brookfield Renewable. However, I'd have no problem continuing to add to it because it's one of my highest-conviction investments. It's a global leader in owning and operating renewable energy, which is becoming increasingly vital in today's power-hungry world. AI data centers, advanced manufacturing facilities, and electric vehicles are driving surging power demand, creating significant growth opportunities for Brookfield. It currently expects to grow FFO per share by more than 10% annually through 2031.

My current trigger to add again is when the yield rises above 5% (around $31 per share). Meanwhile, I'd really load up if its yield ever topped 5.5% (less than $28.50 a share).

Investing with conviction

Brookfield Renewable is a core holding for my portfolio. It provides meaningful dividend income to reinvest and has a strong growth profile, which should combine for a powerful total return over the long term. Given my high conviction in Brookfield, I plan to continue to grow this foundational position. I expect the top renewable energy dividend stock to anchor my portfolio for years to come and to contribute meaningfully to growing my wealth over the long term.

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.