Editing Brookfield Renewable Partners L.P.
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| type = [[Master limited partnership|Publicly traded partnership]] | | type = [[Master limited partnership|Publicly traded partnership]] | ||
| traded_as = {{NYSE|BEP}}<br>{{NYSE|BEPC}}<br>{{TSX|BEP.UN}} | | traded_as = {{NYSE|BEP}}<br>{{NYSE|BEPC}}<br>{{TSX|BEP.UN}} | ||
| foundation = {{Start date and age| | | foundation = {{Start date and age|2011}} | ||
| founder = | | founder = | ||
| location_city = [[Toronto]], [[Ontario]] | | location_city = [[Toronto]], [[Ontario]] | ||
| location_country = Canada | | location_country = Canada | ||
| area_served = | | area_served = | ||
| key_people = | | key_people = Connor Teskey ([[Chief executive officer|CEO]])<br>Richard Legault ([[Chairman]]) | ||
| industry = [[Renewable | | industry = [[Renewable power]] | ||
| products = | | products = | ||
| services = [[Independent Power Producer]] | | services = [[Independent Power Producer]] | ||
| revenue = | | revenue = | ||
| operating_income = | | operating_income = | ||
| net_income = | | net_income = | ||
| assets = [[United States dollar|US$]] | | assets = [[United States dollar|US$]]30.9 billion (2017) <ref>{{Cite web|url=https://www.nasdaq.com/symbol/bep/financials?query=balance-sheet|title=BEP Balance Sheet|website=NASDAQ.com|language=en-us|access-date=2018-07-01}}</ref> | ||
| equity = | | equity = | ||
| owner = | | owner = | ||
| num_employees = | | num_employees = | ||
| parent = [[Brookfield Asset Management]] | | parent = [[Brookfield Asset Management]] | ||
| divisions = | | divisions = | ||
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== '''<u>Overview</u>''' == | == '''<u>Overview</u>''' == | ||
Brookfield Renewable Partners L.P. (BRP), stock ticker BEP, is a publicly traded limited partnership that owns a diversified portfolio of renewable power and sustainable solutions assets. Headquartered in | Brookfield Renewable Partners L.P. (BRP), stock ticker BEP, is a publicly traded limited partnership that owns a diversified portfolio of renewable power and sustainable solutions assets. Headquartered are in Hamilton, Bermuda, the BEP stock is listed on the New York Stock Exchange (NYSE). Brookfield Renewable Partners was founded in 1999 as Brookfield Renewable Power Inc., a subsidiary of Brookfield Asset Management, and rebranded in 2013. | ||
Brookfield Renewable's portfolio includes hydroelectric, wind, solar, distributed energy and sustainable solutions across five continents, 98% of the business is made up of renewable power assets. The company's largest market is the United States, which accounts for approximately 40% of its total capacity. Brookfield Renewable's business model is to acquire and develop high quality renewable power below intrinsic value, finance on a long term low risk basis and optimise cash flows by applying their operating expertise and knowledge to enhance value. | Brookfield Renewable's portfolio includes hydroelectric, wind, solar, distributed energy and sustainable solutions across five continents, 98% of the business is made up of renewable power assets. The company's largest market is the United States, which accounts for approximately 40% of its total capacity. Brookfield Renewable's business model is to acquire and develop high quality renewable power below intrinsic value, finance on a long term low risk basis and optimise cash flows by applying their operating expertise and knowledge to enhance value. | ||
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The company's stock is classified as a "dividend aristocrat" by S&P Global, meaning that it has increased its dividend for 25 consecutive years. | The company's stock is classified as a "dividend aristocrat" by S&P Global, meaning that it has increased its dividend for 25 consecutive years. | ||
== '''<u>Products</u>''' == | == '''<u>Products</u>''' == | ||
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Hydroelectric power capacity is the highest, followed by Wind and DE&SS, with Solar making up the smallest proportion of energy production. | Hydroelectric power capacity is the highest, followed by Wind and DE&SS, with Solar making up the smallest proportion of energy production. | ||
== '''<u>Management</u>''' <ref>https://www.brookfield.com/about-us/leadership?filter=49</ref> == | == '''<u>Management</u>''' <ref>https://www.brookfield.com/about-us/leadership?filter=49</ref> == | ||
[[File:J Blidner Headshot 3.webp|thumb| | [[File:J Blidner Headshot 3.webp|thumb|214x214px|Jeffrey Blidner.]] | ||
=== Chairman of the board - Jeffrey Blidner: === | === Chairman of the board - Jeffrey Blidner: === | ||
On the board since 2011. Blidner is also the vice chair of Brookfield Asset Management. Prior to joining Brookfield in 2000, he was a senior partner of a Canadian law firm. | On the board since 2011. Blidner is also the vice chair of Brookfield Asset Management. Prior to joining Brookfield in 2000, he was a senior partner of a Canadian law firm. | ||
[[File:Teskey.png|thumb| | [[File:Teskey.png|thumb|212x212px|Connor Teskey.]] | ||
=== Chief Executive Officer - Connor Teskey: === | === Chief Executive Officer - Connor Teskey: === | ||
On the board since 2020. Teskey is also the president of Brookfield Asset Management. He is responsible for investments, operations and the expansion of the Renewable Power & Transition business. Teskey joined Brookfield in 2012 and held a variety of investment, financing and restructuring roles, prior to joining he worked in corporate debt origination at a Canadian bank. | On the board since 2020. Teskey is also the president of Brookfield Asset Management. He is responsible for investments, operations and the expansion of the Renewable Power & Transition business. Teskey joined Brookfield in 2012 and held a variety of investment, financing and restructuring roles, prior to joining he worked in corporate debt origination at a Canadian bank. | ||
[[File:Hartley.png|thumb| | [[File:Hartley.png|thumb|212x212px|Wyatt Hartley.]] | ||
=== Chief Financial Officer - Wyatt Hartley: === | === Chief Financial Officer - Wyatt Hartley: === | ||
On the board since 2018. Hartley directs all capital markets activities for the business, including accounting, financial reporting, treasury, taxation and investor relations on a global basis. He has held several senior finance positions across the organization, including Chief Financial Officer of Brookfield Infrastructure Group’s operations in the Americas and Chief Financial Officer of Acadian Timber. Prior to joining Brookfield in 2010, Hartley worked at a big-four accounting firm. | On the board since 2018. Hartley directs all capital markets activities for the business, including accounting, financial reporting, treasury, taxation and investor relations on a global basis. He has held several senior finance positions across the organization, including Chief Financial Officer of Brookfield Infrastructure Group’s operations in the Americas and Chief Financial Officer of Acadian Timber. Prior to joining Brookfield in 2010, Hartley worked at a big-four accounting firm. | ||
[[File:Mazin.png|thumb| | [[File:Mazin.png|thumb|211x211px|Jennifer Mazin.]] | ||
=== General Counsel - Jennifer Mazin: === | === General Counsel - Jennifer Mazin: === | ||
On the board since 2015. Mazin is responsible for transaction execution and public company matters, including corporate governance and public disclosure. Prior to joining Brookfield in 2014, Mazin was Assistant General Counsel at a large global mining company and worked at a New York-based law firm, where she focused on cross-border corporate finance transactions, mergers and acquisitions as well as governance and disclosure requirements. | On the board since 2015. Mazin is responsible for transaction execution and public company matters, including corporate governance and public disclosure. Prior to joining Brookfield in 2014, Mazin was Assistant General Counsel at a large global mining company and worked at a New York-based law firm, where she focused on cross-border corporate finance transactions, mergers and acquisitions as well as governance and disclosure requirements. | ||
== '''<u>Ownership:</u>''' <ref>https://simplywall.st/stocks/ca/utilities/tsx-bep.un/brookfield-renewable-partners-shares/ownership</ref> == | |||
== '''<u> | |||
{| class="wikitable" | {| class="wikitable" | ||
|'''Shareholder''' | |'''Shareholder''' | ||
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The top 10 stakeholders in Brookfield Renewable Partners make up 72.2% of the entire ownership. Other notable investors include Scotiabank (0.48%) and Morgan Stanley (0.39%). | The top 10 stakeholders in Brookfield Renewable Partners make up 72.2% of the entire ownership. Other notable investors include Scotiabank (0.48%) and Morgan Stanley (0.39%). | ||
=== '''<u>Financials</u>''' | == '''<u>Risks</u>''' <ref name=":1">Brookfield Renewable Partners Annual Report 2022 - https://bep.brookfield.com/sites/bep-brookfield-ir/files/brookfield/bep/reports-and-filings/regulatory-filings/annual-reports/2022/bep-2022-annual-report.pdf</ref> == | ||
=== Financial Risks === | |||
'''Electricity Price''' - Exposure to movements in the market price of energy. | |||
'''Foreign Currency''' - Exposed to foreign currency risk including the Canadian dollar, Brazilian real, Euro, British pound sterling, Colombian peso, Indian rupee, Chinese yuan, and Malaysian ringgit. The risk is related to operations, anticipated transactions and certain foreign currency debt. | |||
'''Interest Rate''' - Exposed to interest rate risk on the interest rates for variable rate debt. | |||
'''Credit''' - Exposed to credit risk from operating activities and certain financing activities. The risk is due to counterparties not being able to meet their obligations on energy contracts, interest rate swaps, forward foreign exchange contracts, physical electricity and gas transactions as well as trade receivables. | |||
'''Liquidity''' - Exposed to liquidity risk for financial liabilities. Also subject to internal liquidity risk as they conduct business activities through separate legal entities, and are dependent on receipt of cash from those entities to pay off corporate expenses and make dividend payments to shareholders. | |||
=== Industry and Operational Risks === | |||
'''Natural resource availability''' - Revenues generated by renewable power facilities are correlated to the amount of electricity produced, which are dependent on available water flows, wind and irradiance. The generation facilities are susceptible to damage during extreme weather events, climate change may increase the frequency of extreme weather events, as well as cause a shift in the existing weather patterns. | |||
'''Contract Expiration''' - Certain power purchasing agreements in the portfolio will be subject to re-contracting in the future, if the price of electricity in power markets is declining at the time of re-contracting, it will impact the ability of the company to be able to re-negotiate at favourable terms. | |||
'''Concession renewal''' - The company holds concessions and has rights to operate facilities, e.g. for hydroelectric facilities, the concessions include the rights to the land and water required for power generation. If renewal rights are not granted or an additional cost is imposed on the concession, it could significantly impact operational capacity and profitability. | |||
'''Dam failures''' - Occurrence of dam failures at any hydroelectric generation stations would result in loss of generating capacity until the failure has been repaired, harm to third parties or the environment could expose the company to liability costs. | |||
=== Other Risks === | |||
'''Cyber Attacks''' - The business may be subject to cyber security risks or other breaches of information intended to obtain unauthorised access to proprietary information and that of business partners, destroy data or disable systems through cyber attacks. Any breach of information could go undetected for some time. | |||
'''Development Failures''' - The company has a large development pipeline that includes projects at different levels of advancement, there is no guarantee that all project will be successfully delivered, or delivered on time. | |||
'''Employee Retention''' - The business depends on the skill of the professionals employed, future success will depend on the continued service of these individuals, which could impact the ability of the company to achieve its objectives. | |||
== '''<u>Financials</u>''' == | |||
The table below shows the reported revenue of the previous 5 years for Brookfield Renewable Partners, other financial information required in the calculation of EBIT is also shown. All units are given in USD millions. | The table below shows the reported revenue of the previous 5 years for Brookfield Renewable Partners, other financial information required in the calculation of EBIT is also shown. All units are given in USD millions. | ||
{| class="wikitable" | {| class="wikitable" | ||
|+Historical Financials<ref name=":1" | |+Historical Financials<ref name=":1" /> | ||
! '''Units ($m)''' | ! '''Units ($m)''' | ||
!'''2018''' | !'''2018''' | ||
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! colspan="2" | '''Hydroelectric''' | ! colspan="2" | '''Hydroelectric''' | ||
! colspan="2" | '''Wind''' | ! colspan="2" | '''Wind''' | ||
! colspan="2" | '''Solar''' | |||
! colspan="2" | '''DE&SS''' | |||
|- | |- | ||
! | ! | ||
!'''2022''' | |||
!'''2021''' | |||
!'''2022''' | |||
!'''2021''' | |||
!'''2022''' | !'''2022''' | ||
!'''2021''' | !'''2021''' | ||
Line 394: | Line 367: | ||
| 332.00 | | 332.00 | ||
| 370.00 | | 370.00 | ||
| - | |||
| - | |||
| - | |||
| - | |||
|- | |- | ||
| '''Brazil''' | | '''Brazil''' | ||
Line 400: | Line 377: | ||
| 31.00 | | 31.00 | ||
| 29.00 | | 29.00 | ||
| - | |||
| - | |||
| - | |||
| - | |||
|- | |- | ||
| '''Columbia''' | | '''Columbia''' | ||
| 273.00 | | 273.00 | ||
| 224.00 | | 224.00 | ||
| - | |||
| - | |||
| - | |||
| - | |||
| - | | - | ||
| - | | - | ||
Line 412: | Line 397: | ||
| 134.00 | | 134.00 | ||
| 125.00 | | 125.00 | ||
| - | |||
| - | |||
| - | |||
| - | |||
|- | |- | ||
| '''Asia''' | | '''Asia''' | ||
Line 418: | Line 407: | ||
| 41.00 | | 41.00 | ||
| 32.00 | | 32.00 | ||
| - | |||
| - | |||
| - | |||
| - | |||
|- | |- | ||
| '''Total''' | | '''Total''' | ||
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| ''' 538.00''' | | ''' 538.00''' | ||
| ''' 556.00''' | | ''' 556.00''' | ||
| ''' 374.00''' | |||
| ''' 348.00''' | |||
| ''' 290.00''' | |||
| ''' 242.00''' | |||
|} | |} | ||
Hydroelectric revenue increased by 13% compared to 2021, wind declined by 3.2%, but solar and DE&SS increased by 7.5% and 19.8% respectively. | |||
[[File:Revenue by segment .png]] | [[File:Revenue by segment.png]] | ||
=== Forecasts === | === Forecasts === | ||
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|- | |- | ||
| '''Beta''' | | '''Beta''' | ||
|0.74<ref>https://markets.ft.com/data/equities/tearsheet/summary?s=BEP.UN:TOR</ref> | | 0.74<ref>https://markets.ft.com/data/equities/tearsheet/summary?s=BEP.UN:TOR</ref> | ||
|- | |- | ||
| '''Market Rate of Return''' | | '''Market Rate of Return''' | ||
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|- | |- | ||
|'''Shares Outstanding''' | |'''Shares Outstanding''' | ||
|288.78<ref>https://markets.ft.com/data/equities/tearsheet/summary?s=BEP:NYQ</ref> | | 288.78<ref>https://markets.ft.com/data/equities/tearsheet/summary?s=BEP:NYQ</ref> | ||
|- | |- | ||
|'''Share Price''' | |'''Share Price''' | ||
|29.96<ref>Share Price as of 14/07/2023 - https://markets.ft.com/data/equities/tearsheet/summary?s=BEP:NYQ</ref> | | 29.96<ref>Share Price as of 14/07/2023 - https://markets.ft.com/data/equities/tearsheet/summary?s=BEP:NYQ</ref> | ||
|- | |- | ||
| '''Equity''' | | '''Equity''' | ||
| '''8,651.85''' | | ''' 8,651.85''' | ||
|- | |- | ||
|'''Long Term Debt''' | |'''Long Term Debt''' | ||
|22,797.00<ref>https://markets.ft.com/data/equities/tearsheet/financials?s=BEP:NYQ&subView=BalanceSheet&periodType=q</ref> | | 22,797.00<ref>https://markets.ft.com/data/equities/tearsheet/financials?s=BEP:NYQ&subView=BalanceSheet&periodType=q</ref> | ||
|- | |- | ||
| '''Debt''' | | '''Debt''' | ||
| '''830.99''' | | ''' 830.99''' | ||
|- | |- | ||
| '''E/D+E''' | | '''E/D+E''' | ||
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|- | |- | ||
| '''FCF''' | | '''FCF''' | ||
| '''1,994.97''' | | ''' 1,994.97''' | ||
| '''1,796.75''' | | ''' 1,796.75''' | ||
| '''2,004.69''' | | ''' 2,004.69''' | ||
| '''1,946.44''' | | ''' 1,946.44''' | ||
| '''2,156.77''' | | ''' 2,156.77''' | ||
| '''2,100.91''' | | ''' 2,100.91''' | ||
| '''2,313.63''' | | ''' 2,313.63''' | ||
| '''2,260.17''' | | ''' 2,260.17''' | ||
| '''2,475.28''' | | ''' 2,475.28''' | ||
| '''2,424.21''' | | ''' 2,424.21''' | ||
|- | |||
| '''Growth Rate''' | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
|3.3% | |||
|- | |||
| '''Terminal Value''' | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| ''' 54,662.74''' | |||
|- | |- | ||
|'''Discount Factor''' | |'''Discount Factor''' | ||
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|- | |- | ||
|'''Present Value of FCF''' | |'''Present Value of FCF''' | ||
| '''1,926.16''' | | ''' 1,926.16''' | ||
| '''1,608.35''' | | ''' 1,608.35''' | ||
| '''1,663.72''' | | ''' 1,663.72''' | ||
| '''1,497.65''' | | ''' 1,497.65''' | ||
| '''1,538.56''' | | ''' 1,538.56''' | ||
| '''1,389.49''' | | ''' 1,389.49''' | ||
| '''1,418.67''' | | ''' 1,418.67''' | ||
| '''1,284.89''' | | ''' 1,284.89''' | ||
| '''1,304.63''' | | ''' 1,304.63''' | ||
| '''1,184.60 | | ''' 1,184.60''' | ||
|- | |- | ||
|'''Terminal Value''' | |'''Present Value of Terminal Value''' | ||
| | | | ||
| | | | ||
| | | | ||
|'''26,711.14''' | | | ||
| | |||
| | |||
| | |||
| | |||
| | |||
| ''' 26,711.14''' | |||
|- | |- | ||
|'''Enterprise Value''' | |'''Enterprise Value''' | ||
|'''41,527.85''' | | | ||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| ''' 41,527.85''' | |||
|- | |- | ||
|'''Equity Value''' | |'''Equity Value''' | ||
|'''17,210.85''' | | | ||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| ''' 17,210.85''' | |||
|- | |- | ||
|''' | |'''Share Price''' | ||
|'''$ 59.60''' | | | ||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| | |||
| '''$ 59.60''' | |||
|} | |} | ||
The valuation shows that as of 14/07/2023, Brookfield Renewable Partners is undervalued. There is a potential upside of 99% over 10 years, equivalent to an annual share price rise of 9.9% from the end of 2023. | The valuation shows that as of 14/07/2023, Brookfield Renewable Partners is undervalued. There is a potential upside of 99% over 10 years, equivalent to an annual share price rise of 9.9% from the end of 2023. | ||
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! rowspan="7" |'''Growth Rate''' | ! rowspan="7" |'''Growth Rate''' | ||
!'''2.0%''' | !'''2.0%''' | ||
|$ 94.76 | |$ 94.76 | ||
|$ 75.06 | |$ 75.06 | ||
|$ 59.31 | |$ 59.31 | ||
|$ 46.42 | |$ 46.42 | ||
|$ 35.68 | |$ 35.68 | ||
|$ 26.60 | |$ 26.60 | ||
|$ 18.82 | |$ 18.82 | ||
|$ 12.08 | |$ 12.08 | ||
|- | |- | ||
!'''2.5%''' | !'''2.5%''' | ||
|$ 113.07 | |$ 113.07 | ||
|$ 88.75 | |$ 88.75 | ||
|$ 69.83 | |$ 69.83 | ||
|$ 54.70 | |$ 54.70 | ||
|$ 42.32 | |$ 42.32 | ||
|$ 32.00 | |$ 32.00 | ||
|$ 23.27 | |$ 23.27 | ||
|$ 15.79 | |$ 15.79 | ||
|- | |- | ||
!'''3.0%''' | !'''3.0%''' | ||
|$ 137.48 | |$ 137.48 | ||
|$ 106.34 | |$ 106.34 | ||
|$ 82.98 | |$ 82.98 | ||
|$ 64.81 | |$ 64.81 | ||
|$ 50.27 | |$ 50.27 | ||
|$ 38.38 | |$ 38.38 | ||
|$ 28.46 | |$ 28.46 | ||
|$ 20.07 | |$ 20.07 | ||
|- | |- | ||
!'''3.5%''' | !'''3.5%''' | ||
|$ 171.66 | |$ 171.66 | ||
|$ 129.80 | |$ 129.80 | ||
|$ 99.89 | |$ 99.89 | ||
|$ 77.45 | |$ 77.45 | ||
|$ 60.00 | |$ 60.00 | ||
|$ 46.03 | |$ 46.03 | ||
|$ 34.59 | |$ 34.59 | ||
|$ 25.06 | |$ 25.06 | ||
|- | |- | ||
!'''4.0%''' | !'''4.0%''' | ||
|$ 222.92 | |$ 222.92 | ||
|$ 162.64 | |$ 162.64 | ||
|$ 122.44 | |$ 122.44 | ||
|$ 93.71 | |$ 93.71 | ||
|$ 72.15 | |$ 72.15 | ||
|$ 55.38 | |$ 55.38 | ||
|$ 41.95 | |$ 41.95 | ||
|$ 30.96 | |$ 30.96 | ||
|- | |- | ||
!'''4.5%''' | !'''4.5%''' | ||
|$ 308.36 | |$ 308.36 | ||
|$ 211.90 | |$ 211.90 | ||
|$ 154.00 | |$ 154.00 | ||
|$ 115.38 | |$ 115.38 | ||
|$ 87.78 | |$ 87.78 | ||
|$ 67.07 | |$ 67.07 | ||
|$ 50.95 | |$ 50.95 | ||
|$ 38.04 | |$ 38.04 | ||
|- | |- | ||
!'''5.0%''' | !'''5.0%''' | ||
|$ 479.25 | |$ 479.25 | ||
|$ 294.01 | |$ 294.01 | ||
|$ 201.35 | |$ 201.35 | ||
|$ 145.73 | |$ 145.73 | ||
|$ 108.62 | |$ 108.62 | ||
|$ 82.10 | |$ 82.10 | ||
|$ 62.19 | |$ 62.19 | ||
|$ 46.69 | |$ 46.69 | ||
|} | |} | ||
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{| class="wikitable" | {| class="wikitable" | ||
|+Relative Valuation Table<ref>All financial data was taken from the financial times stock price pages.</ref> | |+Relative Valuation Table<ref>All financial data was taken from the financial times stock price pages.</ref> | ||
|'''Stock''' | |||
|'''Price to Earnings Ratio''' | |||
|'''Return on Equity''' | |||
|'''Earnings Per Share''' | |||
|'''Dividend Yield''' | |||
|'''Annual Dividend''' | |||
|'''Return on Assets''' | |||
|'''Dividend Growth''' | |||
|- | |- | ||
|'''BRP''' | |'''BRP''' | ||
Line 1,006: | Line 1,056: | ||
|11.04% | |11.04% | ||
|} | |} | ||
[[File:Dividend.png|thumb|836x836px]] | |||
[[File:Dividend Growth.png|thumb|844x844px]] | |||
[[File: | [[File:EPS.png|thumb|841x841px]] | ||
The relative valuation shows that Brookfield Renewable Partners pays out the second highest dividend amongst it's competitors, behind only General Electric. Brookfield Renewable is also top 3 for dividend growth, with General Electric having seen massive declines in dividend pay-out, meaning that Brookfield Renewable is a stock with good income prospects. | |||
== '''<u>ESG Factors</u>''' <ref name=":1" /> == | == '''<u>ESG Factors</u>''' <ref name=":1" /> == | ||