June’s Best Buy selections are well-placed to endure recent market volatility, as their respective businesses have proven to be well suited to generating cash flow to support and grow dividends over time, through the business cycle.

Brookfield Renewable Energy Partners LP (TSX: BEP-U, OTC: BRPFF), which owns a large, diversified portfolio of renewable power assets supported by long-term contracts, has slipped since April 30 along with most every dividend-paying stock.

The shares are off from a near-term high of CAD31.66 on May 1, closing at CAD30.04 on June 6. And that’s up from a recent low of CAD29.24 earlier this week. What it means is that Brookfield Renewable is yielding nearly 5 percent and that it’s trading below our buy-under target of CAD32.

Brookfield Renewable’s hydroelectric and wind power facilities are located in the US, Canada and Brazil. Brookfield Asset Management Inc (TSX: BAM/A, NYSE: BAM) owns 65 percent of the company.

As of Dec. 31, 2012, 98 percent of Brookfield Renewable’s expected 2013 generation was under contract, at an average price of CAD83 per megawatt hour and a weighted-average remaining duration of 18 years. These power purchase agreements (PPA) provide cash flow stability and protection against wholesale power price risk.

The generation portfolio is 85 percent hydro, 12 percent wind and 3 percent natural gas-fired generation.

Total generation for the quarter was 5,535 gigawatt hours compared to the long-term average of 5,325 gigawatt hours and up from 4,817 during the first quarter of 2012. The hydroelectric portfolio benefited from favorable inflows resulting in long-term average generation in most regions. Hydroelectric generation was higher due to the contribution of acquired or commissioned facilities in the last 12 months.

Generation from existing hydroelectric facilities in Canada and parts of the US was slightly lower than the prior year, when precipitation and generation levels were well above the average. Reservoir levels on a portfolio basis are in line with long-term average conditions for this time of year.

Generation from wind totaled 539 gigawatt hours, an increase of 81 gigawatt hours compared to the first quarter of 2012. Contributions from facilities acquired or commissioned in California and New England during the last 12 months were partly offset by wind conditions in Canada, which were equal to the long-term average but lower than strong results in 2012.

First-quarter funds from operations were line with management’s internal forecast of CAD162 million, or CAD61 per unit, but were down from CAD175 million, or CAD0.66 per unit, a year ago. Results in 2012 reflect above average hydrology and strong generation in markets where PPA prices are higher than Brookfield Renewable’s average price.

The payout ratio for the period was 57 percent.

It’s important to note that earnings and cash flow can be volatile due to unpredictable nature of wind and hydro conditions. But the hydro portfolio includes 176 stations spread over 69 rivers, reducing operating risk related to any one station as well as exposure to hydrology conditions in any particular river basin.

Brookfield Renewable’s high-quality hydro and wind power generation facilities have low marginal production costs, supporting the company’s competitive advantage over the long term. Operating cash flow continues to cover maintenance capital requirements.

Most of Brookfield Renewable’s borrowings are non-recourse loans at the project level, which isolates risk to the particular operating entity.

Future acquisitions and new development will likely be financed with a mix of equity and project-level debt. The corporate entity will borrow in the interim until permanent financing can be arranged.

The major operating risk for Brookfield Renewable is simply water and wind. Revenues are impacted by hydrology and how that impacts electricity generation and delivery.

Note, too, that in addition to a relatively high dividend payout management must balance the cash flow requirements of maintenance and growth capital expenditures, as well as its future ambitions with regard to acquisitions.

Approximately 43 percent of Brookfield Renewable’s contracted revenues derive from PPAs with entities that are related to Brookfield Asset Management. This raises the question of concentration, but Brookfield Asset Management’s credit ratings from all the majors, including Fitch, Moody’s, S&P and DBRS, are investment-grade.

Eighteen percent of Brookfield Renewable’s power generation is located in Brazil. Expansion there could invite additional political risk. But in all the countries in which it operates, including the US and Canada, material changes in regulations and policies, such as renewable energy, energy market, natural resource management and licensing, could have an adverse impact on earnings and cash flow.

Long-term PPAs will continue to provide support for cash flow and dividends. Renewable resources and production volume will continue to be key drivers of revenue and profit, with diversification being the main mitigation. Portfolio growth in recent years, taking place in various regions, could help improve diversification.

Brookfield Renewable is, fundamentally, an invest-to-grow story. Results for the  first quarter of 2013, for example, were driven by the 378 megawatt Smoky Mountain hydro portfolio, acquired in November 2012 from a unit of Alcoa Inc (NYSE: AA).

During the first quarter management completed a deal for 19 hydroelectric facilities in New England, totaling 351 megawatts, from NextEra Energy Inc (NYSE: NEE). That adds to 103 megawatts of low-cost generation Brookfield Renewable already had in the region, all contracted through 2025.

It also expanded its operating wind portfolio in California to 430 megawatts with the acquisition of Western Wind Energy Corp, which was completed in late May.

In total Brookfield Renewable deployed CAD600 million of equity to acquire over 560 megawatts of hydroelectric and wind facilities. It also achieved commercial operations for a 29 megawatt hydroelectric project in Brazil, which brings the in-country total to 14 stations and 314 megawatts constructed since 2003.

During the quarter management completed CAD580 million in project financings related to its Ontario wind portfolio.

Available liquidity as of May 8 was approximately CAD680 million, which gives it plenty of room to continue to invest and grow. In January, for example, management announced a 5.1 percent boost to the quarterly dividend rate that took effect with the April payment.

Brookfield Renewable’s CE Safety Rating of “6” and growing dividend are compelling long-term attractions. A New York Stock Exchange (NYSE) listing this year could offer a near-term boost as well. Buy Brookfield Renewable Energy on dips to USD32.

Crescent Point Energy Corp’s (TSX: CPG, OTC: CSCTF) monthly dividend rate has been stable since July 2008. That’s nearly five years without an increase. But that’s also five years without a cut. And this timeframe encompasses one of the most volatile periods for commodity prices in recent memory.

On July 4, 2008, the generic front-month crude oil futures contract traded on the New York Mercantile Exchange reached an all-time weekly closing high of USD145.09. By the following Dec. 19 the same contract was priced at USD33.87.

The price of crude recovered through 2009 and 2010, reaching a post-Great Recession peak of USD113.93 on April 29, 2011. Over the past two and a half years the sticky stuff has traded in a range between roughly USD80 on the down side and USD100 on the top.

All the while, however, Crescent Point, which has been a member of the CE Portfolio Aggressive Holdings since September 2011, has maintained its payout. In fact the last time we named it a Best Buy, in November 2012, we headlined the article “Good in a Crisis.”

Crescent Point’s share price certainly suffered during the tumult that marked the time leading up to and following Lehman Brothers’ seminal September 2008 bankruptcy filing. It approached CAD40 in mid-summer that year on the Toronto Stock Exchange (TSX) but was cut nearly in half before Christmas.

From a Dec. 4, 2008, weekly closing low of CAD21.20 on the TSX Crescent Point has rallied to as high as CAD47.95 on March 24, 2011.

The stock has been trending downward from that peak, dragged lower due to the lack of infrastructure available to carry Canada-produced crude to refineries in the US and a corresponding “differential” that’s opened up between prices for Canadian oil and those for output from the US and Europe.

As of this writing Crescent Point can be had for about CAD36 on the TSX, at which level it yields about 7.7 percent.

In the first quarter of 2013 the company continued to execute its strategy of acquiring, exploiting and developing high-quality, long-life light and medium oil and natural gas properties. Crescent Point reported a new production record of 117,663 barrels of oil equivalent per day (boe/d), weighted 91 percent to light and medium crude oil and liquids.

This represents a growth rate of 9 percent over the fourth quarter of 2012 and 30 percent over the first quarter of 2012.

Production growth was driven by several factors, including continued waterflood success, outperformance of wells completed with cemented liners and the application of new technologies and techniques. The company also capitalized on a delayed spring break-up, which allowed for more drilling and completions in the first quarter than planned and has positioned the company well for a strong second quarter.

Based on solid first-quarter results management boosted its 2013 production guidance and capital expenditure plans. Average daily production is now forecast to increase to 114,000 boe/d from 112,000 boe/d in 2012, and the company’s 2013 exit production rate is expected to increase to 117,000 boe/d from 114,000 boe/d. CAPEX is expected to increase by CAD150 million to CAD1.5 billion.

Crescent Point spent CAD459.1 million on drilling and development activities, drilling 227 (164.3 net) oil wells with a 100 percent success rate. It also spent CAD73.6 million on land, seismic and facilities, for total CAPEX of CAD532.7 million.

Following the conclusion of the quarter the provincial government in Saskatchewan approved Crescent Point’s application for a waterflood unit in the Lower Shaunavon resource play, which management described as a “major” milestone that “will allow Crescent Point to implement the Lower Shaunavon waterflood across a larger area.”

This waterflood project is expected to help reduce Crescent Point’s decline rates and add incremental reserves over time. Management continues to seek future approvals, allowing for the implementation of four proposed units for waterflooding in the Viewfield Bakken resource play as well as a second Lower Shaunavon unit.

Crescent Point also began to ship Uinta Basin oil production via rail through a third-party facility in Utah, which the company expects will open up competitive new refining markets for Uinta Basin production and improve supply/demand balances in the Salt Lake City refining market. Management expects to have its own rail loading facility in the state of Utah operational later in second quarter 2013.

Management reported funds flow from operations of CAD455.9 million, or CAD1.20 per share, in the first quarter, a 14 percent increase over first-quarter 2012 funds flow from operations of CAD400.9 million, or CAD1.34 per share. The payout ratio for the period was 57.5 percent.

Shipping oil via rail has allowed Crescent Point to reduce its exposure to volatility in oil-price differentials. Throughout the first quarter the company continued to increase oil deliveries through its three rail terminals in Saskatchewan and Alberta, providing access to diversified refining markets and more stable price differentials to West Texas Intermediate (WTI) crude.

First-quarter average rail throughput was approximately 31,500 barrels per day (bbl/d). Between financial WTI derivatives and term rail contracts, Crescent Point has locked in 18,000 bbl/d of production for the balance of 2013 at average selling prices greater than CAD90 per barrel.

Based on the upwardly revised CAPEX budget, projected average net debt-to-12-month cash flow is approximately 1.0 times, and the company has significant unutilized credit capacity.

As of April 30, 2013, the Crescent Point had hedged 55 percent, 39 percent, 21 percent and 4 percent of its expected oil production, net of royalty interest, for the balance of 2013, 2014, 2015 and the first three quarters of 2016, respectively. Average quarterly hedge prices range from CAD90 per barrel to CAD93 per barrel.

Its ability to grow production, exploit new ways of getting it to market and sustain its dividend well tested, Crescent Point is a strong buy all the way up to USD48.

For more information on Brookfield Renewable, go to How They Rate under Electric Power. Crescent Point is tracked under Oil and Gas. Click on their US symbols to see all previous writeups in Canadian Edge and Maple Leaf Memo.

Click on the Toronto Stock Exchange (TSX) symbol to go to their Google Finance pages for a wealth of information, ranging from news releases to price charts. Click on their names to go directly to company websites.

Both are mid-sized companies. Brookfield Renewable’s market capitalization comes in at around CAD7.8 billion, while Crescent Point’s is CAD13.7 billion. Both stocks have plenty of liquidity on both sides of the border, both in TSX and US-listed symbols.

Brookfield Renewable trades in the US over-the-counter (OTC) under the symbol BRPFF. During management’s conference call to discuss first-quarter results Mr. Legault noted that the company “has made significant progress” on its “pending” listing on the New York Stock Exchange (NYSE) and that he is “optimistic that the process is nearing completion.”

Crescent Point also trades on the US OTC market, under the symbol CSCTF.

Both companies have decent coverage on Bay Street and Wall Street. Brookfield Renewable has 11 analysts tracking it, with eight rating the units a “buy” and three “hold” with no “sells.”

The average 12-month target price, based on forecasts from 11 of the 12 analysts covering the stock, is CAD33.09. This implies upside from Brookfield Renewable’s June 5, 2013, closing price of CAD29.70, not including dividends, of 11.4 percent.

Crescent Point is covered by 23 analysts, 19 of whom rate the stock a “buy.” Three rate it a hold, while one rates it a “sell.” The average 12-mont target price, based on forecasts from 19 of the 23 analysts covering the stock, is CAD45.82.

Based on Crescent Point’s June 5, 2013, closing price of CAD33.95, upside from here according to Bay Street analysts is about 35 percent, not including dividends.

As is the case with all stocks in the Canadian Edge coverage universe, you get the same ownership whether you buy in the US or Canada. These stocks are priced in and pay dividends in Canadian dollars. Appreciation in the loonie will raise dividends as well as the value of your shares.

Dividends paid by both companies are 100 percent qualified for US income tax purposes. Both stocks’ dividends are taxed at the now-permanent Bush-era rates of 5 percent to 15 percent for investors’ first USD450,000 a year of income for couples and USD400,000 for single filers. Above that the maximum tax rate is 20 percent.

Canadian investors enjoy favorable tax status for both companies. For US investors, dividends paid by Crescent Point into IRAs aren’t subject to 15 percent Canadian withholding tax, though they are withheld at a 15 percent rate if held outside of an IRA.

Brookfield Renewable is treated as a partnership for US and Canadian tax purposes. As a partnership, Brookfield Renewable is a so-called “flow through” for US and Canadian tax purposes; in other words, it isn’t subject to tax. Rather, its income is subject to tax in the hands of its shareholders. Because it pays no corporate tax, withholding tax may still apply to IRAs.

Dividend taxes withheld from US non-IRA accounts can be recovered as a credit by filing a Form 1116 with your US income taxes. The amount of recovery allowed per year depends on your own tax situation.