Brookfield Renewable: A Hidden Gem in the Green Energy Boom

The transition to renewable energy is not just a passing trend—it’s the future of global power generation. With the rising adoption of electric vehicles (EVs), corporate demand for clean energy, and a booming cryptocurrency industry, renewable power is in high demand. Yet, despite its potential, one of the sector’s biggest players, Brookfield Renewable (NYSE: BEPC), remains largely overlooked by Wall Street.

The Shift Toward Renewable Energy Is Accelerating

The numbers don’t lie. U.S. electric vehicle sales soared from 294,000 in 2021 to 1.4 million by 2024, according to the International Energy Agency (IEA). This surge in EV adoption means a higher demand for electricity, and utility companies are shifting toward renewable sources to meet that demand.

Many U.S. states now generate a majority of their power from renewables. In states like Iowa, South Dakota, and Kansas, more than 50% of electricity comes from sources like wind and solar. This shift is not just about sustainability—it’s about cost. Renewable energy is now cheaper than traditional fossil fuels, making it the obvious choice for future growth.

Brookfield Renewable’s Global Reach and Diverse Portfolio

Brookfield Renewable isn’t just another green energy firm. It’s a powerhouse in the renewable sector, developing and operating clean energy facilities worldwide. About two-thirds of its operations are in North America, but the company has significant exposure in Europe and South America as well.

Its portfolio includes:

• Hydroelectric power – A key focus, offering reliable and consistent energy output.
• Wind energy – A growing segment as offshore and onshore wind farms expand globally.
• Solar power – Increasingly competitive with advancements in panel efficiency and lower costs.
• Energy storage solutions – Critical for balancing the intermittency of renewables.

With 37 gigawatts (GW) of operating capacity and another 200 GW under development, Brookfield is positioned as a leader in the green energy revolution. For perspective, Duke Energy (NYSE: DUK), one of the largest U.S. utility companies, has 55 GW of total capacity—but only 9 GW comes from renewables. Meanwhile, Consolidated Edison (NYSE: CE) has just 0.8 GW of renewable power.

Brookfield’s massive renewable footprint makes it one of the best-positioned companies to capitalize on the transition away from fossil fuels.

The Growing Demand for Clean Energy

Renewable energy demand isn’t just coming from government mandates. Some of the biggest corporate players in the world are driving the shift.

• Tech Giants and AI Expansion – Data centers require enormous amounts of power, and the artificial intelligence (AI) boom is pushing energy consumption even higher. The “Magnificent Seven” tech giants, led by Amazon (NASDAQ: AMZN), are among the largest buyers of renewable energy. Brookfield already supplies many of them, solidifying its role in the future of tech-driven energy demand.
• Cryptocurrency’s Energy Hunger – The crypto market is heating up again, especially after Bitcoin’s April 2024 halving event. Since Bitcoin mining’s profitability depends directly on electricity costs, miners are aggressively seeking out cheap, renewable energy sources. Brookfield is positioned to meet this demand as well.

Brookfield Renewable’s Financial Performance

Despite strong industry tailwinds, Brookfield Renewable’s stock is underperforming. The company’s full-year revenue grew by 6% in 2024, while funds from operations (FFO)—a key metric for renewable energy firms—climbed 10%.

Yet, the stock is down 6% over the past year, while the S&P 500 surged 23%. This has left Brookfield trading at just 14.5 times FFO, a steep discount given its long-term growth potential.

Brookfield also offers an attractive 5.24% dividend yield, providing investors with steady income while waiting for the stock price to catch up to its fundamentals.

Why Wall Street Is Missing the Opportunity

Investors seem hesitant on renewable energy stocks, partly due to concerns about high interest rates. However, Brookfield Renewable’s long-term contracts and diversified revenue streams make it far more resilient than many other green energy firms.

In fact, institutional investors continue to increase their stake in the company, recognizing its potential as a long-term growth play. As the world moves toward net-zero emissions goals, Brookfield stands out as one of the most compelling investment opportunities in the space.

For those looking to invest in the future of energy, Brookfield Renewable is a stock worth watching. It may not be skyrocketing now, but its long-term trajectory suggests it has plenty of room to run.