Small Cap Strategist is published by Crystal Equity Research an independent research resource on small capitalization stocks. Follow along as we discuss the most recent trends in the small-cap sector, investigate interesting companies and pan a few not-so-promising stocks.
you an investor hungry for current income?Is there a green line of global warming fear running through your
investment selections?I have stock that
fulfills both requirements.Brookfield Renewable Energy Partners (BEP:NYSE) is a renewable
power producer with assets in Canada, the U.S. and Brazil.Brookfield generates over 5,900 megawatts of
power each year from plants running on river water, wind or natural gas.Another 2,000 megawatts is apparently under development
in Canada and Brazil.
Brookfield does best is hydroelectric production.The company claims over 170 hydropower
stations across the U.S., Canada and Brazil, diverting river water through
turbines to generate very clean energy.Hydroelectric
power generates less than 5% of the greenhouse gas emissions from coal-fired
power plants, which can spew out as many as 900 tons to 1,000 tons of carbon
dioxide per gigawatt hours of electricity produced.More details can be found from the Global Reporting Initiative provides
information on the greenhouse gas emissions from various power sources.
Brookfield’s hydroelectric power is green enough for you, then let’s move on the
company’s generation of income for its shareholders.Since Brookfield shares began trading in
October 2001, the stock price has climbed steadily to a level 230% higher than
its debut price.
started paying a quarterly dividend in December 2011.Management has pledged to distribute between
60% and 70% of funds from operations as well as to grow distributions by 3% to
5% each year.The current quarter
dividend is $0.3625 per share.At the
current price that represents a very attractive forward dividend yield of
5.1%.Does Brookfield have the cash to fulfill
its dividend pledge?
has reported net losses in two of the last three years.Yet, investors looking only at net income
will not get the full answer to the dividend policy question.Indeed, the company consistently generates significant
positive cash flows.In the last twelve
months Brookfield converted $1.33 billion in revenue to $395.0 million in cash
sales-to-cash conversion ratio of 29.7% stands out among power producers.What is more Brookfield has $227 million in
cash on its balance sheet. That is a
good nest egg, but we do note the company has $7.2 billion in debt on the
balance sheet as well.
the debt, Brookfield is an attractive holding for income-seeking
investors.The icing on the cake is a
beta measure of risk at a tepid 0.40. If the stock as it trades on the Toronto
(BEP.UN:TSX) or New York exchanges
(BEP:NYSE) appears a overpriced, there
is several series of preferred stock that also trade on the Toronto exchange.
Neither the author
of the Small
Cap Strategist web log, Crystal Equity
Research nor its affiliates have a beneficial interest in the companies