1 Absurdly Undervalued Growth Stocks Down 40% To Buy A Handover Option

Written by Nicholas Dobroruka of The Motley Fool Canada

There aren’t many companies on the TSX that boast both high-yield and growth stocks. Typically, high-yield dividend stocks aren’t known for outperforming the market, and growth stocks aren’t typically known for paying high-yielding dividends, let alone dividends at all – that is, until the renewable energy industry started declining.

It’s time to replenish our renewable energy supplies

Since the beginning of 2021, the entire renewable energy sector has been on a downward trend. Leaders across the industry have seen a gradual decline in common pricing for much of the past three years.

For short-term investors, apart from passive income, there may not be much interest in shares of renewable energy companies. We can very well see the sector continuing its downward spiral in the coming months. But for those with long-term time horizons, there’s plenty of value to capture.

Even amid the recent slide, many beaten-down renewable energy companies have still outperformed market earnings over the past five years. This doesn’t even take into account dividends, where yields have increased as prices have fallen.

There is huge growth potential in the renewable energy space. Long-term investors would be wise to have at least one beaten-down green energy stock on their watchlist today.

Brookfield Renewable Partners

If you’re looking for immediate exposure to the growing renewable energy space, you can’t go wrong with a market leader like Brookfield Renewable Partners (TSX:BEP.UN).

This is all done by a $20 billion company. It has a well-diversified portfolio of renewable energy assets spread across the globe.

Excluding dividends, Brookfield Renewable Partners shares are down nearly 40% since the beginning of 2021. Still, the nearly 50% return for growth stocks over the past five years was good enough to outperform the benchmark S&P/TSX composite index.

Value, Growth, and Passive Income: What’s Not to Like?

In addition to its discounted price and long-term growth potential, Brookfield Renewable Partners can also be a significant source of passive income.

The story continues

Following the recent delisting, the dividend yield has increased to 5%.

As growth stocks eventually return to their best market prices, yields will naturally decline. For now, though, the 5% dividend yield alone is reason enough to keep these growth stocks in your sights.

Stupid summary

The renewable energy space has faced challenges over the past few years, but it’s hard not to be optimistic about the long-term opportunities in this space. Demand for green energy computing is expected to continue to grow, so now could be an extremely opportunistic time to invest.

Brookfield Renewable Partners’ global positioning makes it an excellent choice for anyone just starting to invest in renewable energy. The company can provide immediate, well-diversified exposure to the sector.

Don’t miss your chance to power one of the largest renewable energy stocks on the market. You’ll be hard-pressed to find another 5% dividend stock with record market performance like Brookfield Renewable Partners on the TSX.

The post 1 Ridiculously Undervalued Growth Stocks Drop 40% to Buy Hand Over Fist appeared first on The Motley Fool Canada.

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Fool Nicholas Dobroruka holds positions at Brookfield Renewable Partners. The Motley Fool recommends Brookfield Renewable Partners. The Motley Fool has a disclosure policy.

2024