Stock Analysis

Should You Be Adding Brookfield Renewable (TSE:BEPC) To Your Watchlist Today?

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For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Brookfield Renewable (TSE:BEPC). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.

Check out our latest analysis for Brookfield Renewable

How Fast Is Brookfield Renewable Growing Its Earnings Per Share?

Brookfield Renewable has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. Thus, it makes sense to focus on more recent growth rates, instead. Impressively, Brookfield Renewable's EPS catapulted from US$1.88 to US$4.11, over the last year. Year on year growth of 119% is certainly a sight to behold.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. Not all of Brookfield Renewable's revenue this year is revenue from operations, so keep in mind the revenue and margin numbers used in this article might not be the best representation of the underlying business. Brookfield Renewable maintained stable EBIT margins over the last year, all while growing revenue 5.2% to US$4.0b. That's progress.

You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.

TSX:BEPC Earnings and Revenue History January 6th 2024

In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Brookfield Renewable's forecast profits?

Are Brookfield Renewable Insiders Aligned With All Shareholders?

It's said that there's no smoke without fire. For investors, insider buying is often the smoke that indicates which stocks could set the market alight. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.

Even though some insiders sold down their holdings, their actions speak louder than words with US$1.0m more invested than sold by people who know they company best. This overall confidence in the company at current the valuation signals their optimism. We also note that it was the Independent Director, Louis Maroun, who made the biggest single acquisition, paying CA$528k for shares at about CA$40.06 each.

Does Brookfield Renewable Deserve A Spot On Your Watchlist?

Brookfield Renewable's earnings per share have been soaring, with growth rates sky high. Growth-minded people will be intrigued by the incredible movement in EPS growth. And indeed, it could be a sign that the business is at an inflection point. If this is the case, then keeping a watch over Brookfield Renewable could be in your best interest. What about risks? Every company has them, and we've spotted 5 warning signs for Brookfield Renewable (of which 2 are a bit unpleasant!) you should know about.

The good news is that Brookfield Renewable is not the only growth stock with insider buying. Here's a list of growth-focused companies in CA with insider buying in the last three months!

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

Valuation is complex, but we're helping make it simple.

Find out whether Brookfield Renewable is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.