This 5.2% yield investment proves that high-yield investors don’t have to wait out the artificial intelligence (AI) revolution.
If you take a step back and think about it, artificial intelligence (AI) is nothing more than a fancy computer program. That means it must be run on a computer. And that computer can’t function without a reliable power source. This is why dividend investors will find this exciting ultra-high yield investment opportunity so attractive.
Brookfield Renewable is clean, global and already on the market
Brookfield Renewable (BEP +3.22%)(BEPC +3.02%) is a clean and sustainable energy company. It has assets in the hydropower, solar, wind, storage and nuclear energy sectors. And it has offices in North America, South America, Asia and Europe. It is essentially a one-stop shop for customers looking for clean energy. It is also a one-stop shop for investors looking for exposure to the renewable energy sector.
Image source: Getty Images.
A major expansion is currently underway to support artificial intelligence. The need for reliable energy is enormous, and Brookfield Renewable is already working with Brookfield Renewable Microsoft And Alphabet‘s Google to provide them with electricity. Google’s 3 gigawatt deal is particularly interesting because it focuses specifically on hydropower. Microsoft’s deal is more than three times larger and, perhaps out of necessity, is not tied to a specific energy source.
There is enough money in circulation
The AI opportunity is clear, but what does that mean for investors? For Brookfield Renewable shareholders, this means dividends. For starters, Brookfield Renewable’s partnership class offers a lofty 5.2% yield. The business class has a return of 3.8%. The two classes represent the same entity and have the same dividend. The return difference is caused by demand, with institutional investors often not allowed to enter into partnerships.
Brookfield Renewable Partners
Today’s change
(3.22%)$0.95
Current price
$30.47
Key data points
Market capitalization
$9.3 billion
Day range
$29.72 -$30.47
Range of 52 weeks
$19.29 -$32.72
Volume
346K
Avg. full
741K
Gross margin
17.10%
Dividend yield
4.90%
These dividends, meanwhile, are supported by long-term power supply contracts. The cash flows that Brookfield Renewable generates are therefore reliable. Given the company’s expectation of up to $10 billion in capital investment opportunities over the next five years, there is also room for growth.
Management aims for distribution growth of between 5% and 9% per year in the near future. Over the past ten years, the dividend has grown at a compound annual rate of 6%, so this target is clearly achievable.
If you’re a dividend investor, this ultra-high yield opportunity could be your way to join the excitement around artificial intelligence as it expands into new industries. That said, demand from the AI expansion likely won’t be a one-time event; Brookfield Renewable will likely benefit from AI spending for years to come.
Reuben Gregg Brewer holds positions at Brookfield Renewable Partners. The Motley Fool holds positions in and recommends Alphabet and Microsoft. The Motley Fool recommends Brookfield Renewable and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.
