Brookfield Renewable Energy (BEP.UN-T)

Not easy in the space to find a company that will benefit long term from green trends. This is probably the best way to play. Owns tremendous assets. He owns the parent BN.

A very hot sector right now. Tech companies building data centres are entering long-term contracts for power. This technology is still relatively new; nothing online yet in NA, only 1 in China and 1 in Russia. At least 5-10 years before production comes on.

BEP.UN has Westinghouse, which services the nuclear industry. That's her exposure. Stocks have had such a huge run, a lot of expectations are built in, so this is not the time to chase. 

He owns BN instead. The key to data centres is that they all need power, and this is one of the biggest wind/solar producers. This partnership will be one of the strongest parts of private equity in the next decade, and is right in BEP.UN's sweet spot.

Likes the Westinghouse acquisition. Its hydro assets are long life with low operating costs. Likes MSFT deal. Tech companies are building data centres, and the #1 thing they need is consistent and stable power. Her bet is not centred on AI, it's focused on data. Population growth plays into need for power as well. Yield is 5.7%.

Strong play in the space regarding its balance sheet and positioning. Volatile this year, but usually comes out ahead. Dividend relatively safe. Outlook for renewables continues to improve, especially as we get into rate cuts.

BEP.UN reported funds from operations of 51c, growing by 9% from the year prior, but just missing estimates of 52c. Revenue came in at $1.48B, increasing 22.9% year-over-year, but falling just shy of estimates of $1.49B.  The company deployed or committed $8.6B of capital ($970 million net to Brookfield Renewable) across multiple investments globally. BEP.UN secured contracts to deliver an incremental 2,700-gigawatt hours per year of generation, of which ~90% of development was with corporate customers. Distribution was unchanged. Not a bad quarter from BEP.UN as FFO and revenue saw decent growth, despite coming up just short of estimates. We like to see the increased demand from corporate customers and think this can be a growth catalyst in the future. 
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We are comfortable starting a position now. The stock was initially up big to start May following earnings and the Microsoft partnership. It has since pulled back, but we think there are long-term trends that make renewables attractive, and BEP.UN specifically has a large portfolio of assets to capitalize here. Rates starting to come down will also be key for the stock due to how much debt it has.
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Good, stable company. Interest rate backdrop made 2022-23 particularly difficult for renewables. Will benefit from lower rates. Increasing demand for energy, whatever kind, is a really nice tailwind. Likes partnerships with CCO and MSFT.

In addition to owning BN, she owns this one directly for exposure to the renewable space. Likes its scale and global presence. In hydro, solar, wind. Did well under Biden, then higher rates hurt, stock's now trying to move up.

True that Trump's not as friendly to renewables. But it's a long-term, secular trend that not's going to stop.

A wonderful company, one of the best in this sector with a unique operating platform. Shares had declined, but popped after striking a deal with Microsoft in a good deal; data centres need massive power.

Recent Microsoft deal is good for the business. High quality company with excellent growth prospects. Modelling ~8% EPS growth. Very good with rise in A.I. power demand. Good place to buy at current stock price valuation. 

An AI component from the MSFT deal, encouraging. She's owned it for a long time for exposure to the renewable sector, a secular trend. Interest rates have dampened things down, as debt servicing costs increase and cashflow gets discounted at a higher rate. Rates going down would be a tailwind. 

Global. Funding for projects comes from the Brookfield group. Active asset recycling -- buy cheap, develop it to maturity, sell it for cash, redeploy that cash. Yield is 5.49%.

He looks for faster-growing, smaller names. He prefers companies that do metering and monitoring of the grid. Even though it's partnering with MSFT, he's found better ways to play the AI theme.

BIP is more sensitive to interest rates, and will constrained when rates rose. Also, they pay a dividend which was competing with high rates. As rates decline, this will benefit BIP and encourage more building projects. In contrast, BEP is a tougher go, because the transition to renewables will take longer than many expect. But BEP is best in class and its managers are fantastic. BEP's use of AI (with Microsoft) will benefit the stock, but we're ahead of ourselves. 

Most renewables over the 18 months have been under pressure due to aggressive rate hikes, but if rates decline mid-2024, you can add to this, just based on valuations.