NextEra Energy’s Historical Bargain

NextEra Energy on the NYSE as NEE boasts a dividend yield of 3.3%, slightly below the industry benchmark. However, this yield is currently close to its highest level in a decade, indicating an investment steal. Notably, the company has raised its dividend for 29 consecutive years, demonstrating a strong commitment to shareholders.

NextEra’s annualized dividend growth rate of 10% over the past decade is exceptional, explaining its premium valuation. In a sector where 5% growth is remarkable, NextEra’s record is truly impressive.

Upcoming Dividend Growth Trajectory

In a changing utility landscape marked by rising interest rates, NextEra Energy remains bullish, projecting a 10% dividend growth rate up to 2026. With 70% of its business in a regulated utility segment like Florida Power & Light, which benefits from a growing customer base in Florida, the core operations remain solid.

While adjustments may be necessary due to higher costs driven by interest rates, NextEra is confident that its growth in renewable energy, constituting the remaining 30%, will offset any negative impacts. The company aims to double its renewable energy capacity by 2026, a testament to its growth potential.

A Unique Investment Opportunity

NextEra Energy may not appeal to high-yield seekers, but for dividend growth or growth and income investors, it presents a compelling opportunity. With a unique business model and a stellar track record in dividend growth, NextEra Energy stands out among its peers.

Investors eyeing NextEra Energy should carefully consider their investment strategy. While not included in the Motley Fool’s top 10 stock picks, NextEra Energy’s consistent performance and growth potential could offer significant returns to savvy investors.