Brookfield Renewable Partners (BEP.UN.TO)

Concerns that Europeans have capped returns on some assets. Pretty solid company that does a good job acquiring. Don't invest just because of the Westinghouse partnership with CCO, as nuclear faces headwinds right now. See his Top Picks for his choice in the sector.

Higher interest rates have been a headwind on the company.
Debt on balance sheet expensive with rising interest rates.
Still owns shares - will continue to stand behind company.
Global company with scale.
Buyers market with renewable sector becoming out of favor.
Recent equity raise creating an overhang on shares.
Expanding into nuclear energy - very promising. 

Expecting further annual returns with dividends.
Will keep shares in company for next 50 years.
Good long term investment.
Believes future of renewables very bright. 

BEPC is now trading at 13.3x times' EV/EBITDA. BEPC generates predictable revenue and solid cash flow due to the recurring nature of its renewable power assets. The balance sheet is leveraged with $13.1B in net debt, and the net debt/EBITDA is around 5.1x. We think BEPC is trading quite cheap with an attractive yield which is covered quite well by cash flow. High interest rates are headwinds for leveraged companies and capital intensive businesses. However, given the track record of healthy cash flow profile, we would be comfortable averaging into BEPC over time.
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It is one of the largest owners of renewable assets. The renewables space has been under pressure lately with increasing interest rates and commodity prices but he still likes it. The company is able to pass along the costs of inflation. The dividend is 6%.

Rallied when Democrats got into power, got ahead of itself. Higher interest rates have been a headwind. Likes it. Quite large, global player, involved in different sources of renewable energy. Westinghouse gives them niche entry into nuclear. Most cashflows are inflation-protected. Relatively attractive yield of 4.5%.

He scaled back on a lot of renewables. A great long-term investment theme, but they're interest sensitive and also cost sensitive. Lay out huge amounts of capital for development projects. With labour and material costs going up, hard to maintain level of investment returns they're used to. Dividend not at risk. It's about rising rates and capturing that investment return. 

Stock performance poor the past year.
Rising interest rates not good for business (better returns elsewhere).
Strong assets for the long term.
Good time to buy given current share price. 
Parent company very strong (able to provide capital). 

If he had to pick one of the Brookfields, it would probably be this one. Sees more of a growth profile. Likes the renewable energy space.

Bell weather in renewable sector.
Strong cash flow generating ability.
Will be a good long term hold (5-10 years).
Strong dividend that grows every year

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.

Reported revenue of $1.2B, up 9.6% and ahead of estimates ($1.03B). 
EBITDA was $461M, up 7% and short of estimates ($499M). 
The distribution was boosted 5.5%. 
Per unit cash flow rose to 35c from 33c. 
The year was a record and it has significant capital for expansion and multiple growth projects in the works. Unlock Premium - Try 5i Free

Uninspiring year. Did get Westinghouse, a transformative and nuclear acquisition. Excited about the nuclear space. Buying at current levels.

You have to evaluate each company separately. He owns BEP.UN and BIP.UN, as he finds those the most attractive long term. With those two, you tap into the Brookfield global, private equity expertise, with a focus on renewables and infrastructure. You have to analyze the risk/reward and see what's right for you. 

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Solid cash flow and earnings growth. In a fast-growing competitive sector. Strong backing of parent company. Improved margins and valuations stable. Unlock Premium - Try 5i Free