Brookfield Renewable (BEP) 4Q2018 Results were in line with expectations. The company is Powering On towards its mission of achieving 12-15% total return per year. BEP raised its dividend by 5% to $2.06 per year from $1.96 per year. With units trading at $29 which is a 7% current yield and a 5-9% dividend growth projected the likely forward annual return achievable is 12% to 16%.
BEP is progressing cost reducing initiatives in Colombia Isagen Hydro and in US at Terraform Power (TERP) wind and solar assets. BEP also is lengthening PPA contracts in Colombia and Brazil and has most US contracts locked in till 2029. BEP has select development projects ongoing and also has possible acquisitions in India after a patient wait of 6 years. BEP has potential upside with partial asset dispositions (while retaining control) to pension funds as they are doing to Canadian assets at sub 5% cap rate.
Overall we believe BEP is operating well and generating growing free cash-flow and well positioned to grow in its market of Global Renewable Power Generation. We believe BEP is worth $32 to $35 per unit.
Brookfield Renewable 4Q2018 Letter To Unitholders
Brookfield Renewable 4Q2018 Presentation
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