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Brookfield Renewable Partners L.P. (BEP.UN $34.84)
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Brookfield Corporation Class A Limited Voting Shares (BN $90.27)
Q: I am interested in the divergence in performance between BN and its associated companies including BEP.UN. I own BEP.UN and BIP.UN both of which have a history of strongly outperforming BN. More recently they have fallen off while BN has fluorished. Can you comment and what would be your advice on switching some holdings into BN?
Thanks
Thanks
5i Research Answer:
Keep in mind historical performance of BN has been impacted by its numerous spin outs over the years. The value of these should be included when looking at historical returns. BN has been strong of late as it has a massive amount of capital available for M&A transactions. With interest rates moving lower and some uncertainty in the market gone (election, inflation) investors are betting it will be very active in the next couple of year. Recent moves to move BAM's head office to NYC are also attracting attention. Meanwhile, BEP has been weak for various reasons, including sentiment as Trump is less favourable to the renewable space. BIP is up 14% in the past year, and does have a more diversified cash flow stream than BEP.