Brookfield Renewable Partners (BEP.UN.TO)

Unique in the sense that they are a true global renewal business within Canada. One of the best run management teams with some of the best assets in the renewal space, mostly hydro. A slower yield growth name, but is stable. If you think rates are going to rise, which he thinks they will, there could be a moderate pullback.

Preferred E 5% Series 5. This is a perpetual and won’t get called until 2018 at $26 and starts dropping down the Call price. Current yield is 5.81%. The yield to Call out to 2022 is 7.38%, which is a bond equivalent of almost 10%.

This is the more conservative of the Brookfield’s subs, but is very high quality. Has 90% of Hydro with 90% contracted through this coming year and next. Made 3 acquisitions which will start cash flowing in the 2^nd half of the year. Cash flow and distribution will grow in the 6%-7% area in the next few years. 5.3% dividend yield.

Like most of the renewable energy companies, this is fully valued. Have great assets, mostly hydro. Very well managed. Big company and it is very tough to move the needle in terms of growth from here. He looks at this type of holding as being more bond like for the yield. Doesn’t expect you will see a lot of capital appreciation.

‘Renewable’ is a favoured word. An extremely well run company. Very hydro focused. 5.4% dividend.

Preferred E. The falling share price is not because of the company, but because of the fixed income market where people are worried about rising interest rates. Preferred shares sit between equity and bonds. In a rising interest rate environment, preferred shares are going to come off the same as bonds. He would seriously consider moving from the preferred shares to the common shares because this is a very good company and will likely increase their dividend over time.

Looks quite attractive here. Utilities is one of those spaces that have come under a bit of pressure because of concerns about interest rates. Has a slightly higher growth profile compared to some of the other utility power names. Well-run company.

Probably one of the top 2 companies globally in terms of renewable assets. Have something like 17 billion, of which 84% is Hydro with the rest being wind. His target is $32 in 12 months and on a longer-term basis, he is very, very optimistic about it. Recently announced they were confident about being in the upper end of their 3%-5% cash flow and distribution growth target. If there is a reasonable increase in power prices, back towards sort of the mid-2007-2008 levels in the US and improvements in Brazil, he feels the growth and cash flow could be actually double that at 10%. 5.3% dividend yield.

(A Top Pick April 23/12. Up 5.85%.) Sold all his holdings at between $30 and $31 in late 2012. Has pulled back significantly so he has been adding to his holdings lately. Very good value here. Should grow its dividend 4%-5% a year over the next 4 or 5 years.

(A Top Pick June 27/12. Up 12.05%.) This one, like other renewables, has been hit with the backup in rates. However, he thinks they have an attractive set of assets and an incredibly strong partner and parent in Brookfield. This has wind and run of river projects, which are among the best renewables.

Stock has gone sideways over the last number of months. They pulled an issue, which he thinks was for about $400 million that would have been used to fund some acquisitions. Stock has not recovered from this. Internal growth is modest but predictable. Improvement in the stock will come from their success in future acquisitions and steady increases in the dividend, which have exceeded the 3%-5% range that they targeted. Reasonably priced. This is sort of a long-term Buy because this is in a long-term industry. 90% of its assets relate to Hydro capacity.

(A Top Pick June 21/12. Up 14.89%.)

(A Top Pick June 21/12. Up 19.78%.) They continue to be a very good acquirer. He is adding to his position on weakness.

5.3% yield. They did a big acquisition and are absorbing it. Likes the family of companies and does not know what has caused it to dip. He is still positive.

(A Top Pick April 23/12. Up 13.7%.) Had a very good run but when it got into the high $20’s, he took profits and switched into something else.