NextEra Energy (NEE) is a major American energy company focused on clean energy and utility services. Recently, NextEra increased its quarterly dividend by 10%, raising it to $0.5665 per share.
NextEra’s dividend hike highlights its resilience in providing consistent returns despite macroeconomic challenges. This increase is particularly noteworthy, reflecting NextEra’s financial strength and commitment to shareholders.
Should you buy NextEra Energy stock after this dividend hike? Let’s explore whether this clean energy giant is worth your investment.
NEE’s Financial Metrics and Dividend Dynamics
NextEra Energy’s (NEE) recent 10% dividend hike has definitely grabbed attention, bringing its forward dividend to $2.27 per share with a yield of 3.2%. This increase aligns with NextEra’s plan to grow dividends by about 10% annually through 2026. It shows how strong the company’s finances are and how confident it is about its future.
NextEra trades at a premium compared to industry averages. With a trailing P/E of 20.61x and a forward P/E of 19.25x, the stock isn’t cheap. Its market capitalization of $145 billion and enterprise value of $226 billion reflect its leadership in utilities.
The stock is currently priced near $71, up nearly 15% over the past 52 weeks despite a small of 0.5% in the year to date.
Looking at NextEra’s financials, 2024 was a great year. The company’s adjusted earnings for the full year reached $7.063 billion, or $3.43 per share, which is an 8.2% increase from $3.17 in 2023. This growth is impressive, especially considering the tough economic conditions.
In the fourth quarter of 2024, adjusted earnings were $1.095 billion, or $0.53 per share, slightly better than the previous year. These results show that NextEra can consistently grow, even in a complex energy sector.
NextEra’s subsidiaries are doing well too. Florida Power & Light (FPL) increased its regulatory capital by about 10% year-over-year. NextEra Energy Resources had a record year in new renewables and storage, adding over 12 gigawatts to its backlog. These achievements show NextEra’s focus on both traditional utilities and clean energy innovation.
NextEra’s Green Catalysts and Future Growth Drivers
NextEra Energy is making big moves to lead the clean energy transition. The company recently announced a massive $120 billion investment in U.S. energy infrastructure over the next four years. This plan aims to boost renewable energy capacity and modernize its grid.
At the same time, NextEra is undergoing leadership changes. Brian Bolster is set to become the new president and CEO, while Mike Dunne will take over as CFO.
In addition to its infrastructure investment, NextEra is teaming up with GE Vernova (GEV) to develop natural gas-fired power generation projects across the U.S. These projects will help meet the growing electricity demand from sectors like artificial intelligence and data centers.
By combining natural gas (NGJ25) with renewable energy and storage solutions, NextEra ensures power reliability while moving toward a cleaner energy mix.
Texas is a key area for NextEra’s expansion. The company is considering doubling its $20 billion investment in the state due to rising energy demand driven by population growth, industrial activity, and extreme weather events.
Texas is already the largest power producer in the U.S. and is expected to see electricity demand double by 2030. This aligns with broader national trends, as the U.S. prepares for what could be its most energy-intensive decade in history, with demand potentially outpacing supply until 2030.
What Analysts Think About NEE Stock
For 2025, the company expects adjusted earnings per share to range from $3.45 to $3.70. Looking ahead to 2026 and 2027, these figures are projected to grow to between $3.63 to $4.00 and between $3.85 to $4.32, respectively.
These projections show NextEra’s confidence in its operations and ability to deliver consistent financial results, especially as it expands its renewable energy and infrastructure investments.
Analysts are optimistic about NextEra’s future. Analysts have given it a consensus “Moderate Buy” rating. The average price target is $85.05, suggesting potential upside of about 20% from its current stock price. The Street-high price target of $102 implies more than 40% upside potential over the next 12 months.
Conclusion
In conclusion, NextEra Energy’s 10% dividend hike, strong growth prospects, and leadership in renewable energy make it a compelling option for long-term investors. With analysts projecting 20% upside to an average price target of $85.05, the stock offers both income and growth potential.
While its premium valuation may deter some, NextEra’s consistent earnings growth and strategic investments in clean energy solidify its position as a reliable choice. So, should you buy? For many, the answer is “yes.”
