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Brookfield Renewable Partners L.P. (BEP.UN)
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Brookfield Corporation Class A Limited Voting Shares (BN)
Q: If you owned BEP and BN, do you think it's worth selling BEP to buy BN as a replacement? I understand is that BEP pays BN a lot in fees, and that would be the smarter play in the longer run. What would you think of that? What are people saying about the cagr growth over the next few years? For example, if BEP is expected to grow up to 12%, but BN is expected to grow at 18%, BN would probably be the better choice. Is that logical thinking at all? Thank you!
5i Research Answer:
We like BEP a lot, but BN is more growth-focused. It pays a lower dividend and thus has more capital to re-invest. It also, of course, has exposure already to BEP. BN has a lot of available capital for deals, and its growth rate will largely be dictated by how fast it spends this money. Based on consensus, EPS is expected to more than double this year and rise about 10% in 2025 and 2026. BEP, as a utility, is expected to show slower growth overall, but cash flow is quite stable. If an investor is growth-oriented and needs less income, we would be OK concentrating a position into BN.