Oklo (OKLO +4.00%) and NuScale Power (SMR +13.73%) are trying to build businesses around small modular nuclear reactors (SMRs). They both have very exciting technology and money-losing businesses. They are start-ups, so that’s to be expected. I’m a conservative income investor, so no matter how interesting Oklo and NuScale are, I’m not going to buy either.
But that doesn’t mean I can’t capitalize on the AI-powered boom driving demand for nuclear power. I’ve got exposure to that sector, and more, with my investment in Brookfield Renewable (BEP +3.13%)(BEPC +4.00%).
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What does Broofield Renewable do?
As Brookfield Renewable’s name implies, it focuses on renewable power, with a global portfolio of clean energy assets, including hydroelectric, solar, wind, and storage. However, it also owns 50% of Westinghouse, a company with a long history of providing products and services to the nuclear power industry. Because nuclear power doesn’t emit greenhouse gases, it is considered a clean energy source.
Oklo and NuScale are pure plays, which increases risk, and their technologies are still untested at scale. Either one could turn into a big investment win, and either one could also turn out to be a dud. Brookfield Renewable’s business is profitable and built on a foundation of well-understood assets. That includes Westinghouse, which is also working on SMR technology. So I’m not giving up the opportunity; I’m just investing in it in a way that better suits my conservative, dividend-focused investment approach.
Today’s Change
(4.00%) $1.44
Current Price
$37.42
Key Data Points
Market Cap
$6.8B
Day’s Range
$36.32 – $37.60
52wk Range
$31.19 – $45.18
Volume
1.9M
Avg Vol
1.6M
Gross Margin
25.25%
Dividend Yield
4.09%
There are two ways to own Brookfield Renewable
There’s a small complication with Brookfield Renewable. You can buy it in one of two forms, both of which represent the same business and have the same dividend. Brookfield Renewable Partners, which I own, tends to trade at a lower price point because some investors don’t want to, or are legally barred from, owning partnerships. Since Brookfield Renewable Corporation trades at a slight premium, its yield is lower, currently around 4.3%, compared to around 4.5% for Brookfield Renewable Partners.
Either one you pick, however, you still get access to the nuclear power demand being driven by the AI revolution. What’s interesting, though, is that AI isn’t only driving demand for nuclear power; it is also driving demand for clean energy more broadly. Brookfield Renewable, for example, has power supply deals with Microsoft (MSFT +0.19%) and Google. So, all in, Brookfield Renewable can give you more exposure to AI-driven demand than you would get if I bought a pure-play nuclear power stock. And you get to collect that attractive yield, too.
Reuben Gregg Brewer has positions in Brookfield Renewable Partners. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends Brookfield Renewable, Brookfield Renewable Partners, and NuScale Power. The Motley Fool has a disclosure policy.
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