There’s a lot going right for NextEra Energy (NYSE:NEE) right now. NEE stock has had some potential good news recently, and I think it will carry the stock higher.
The Juno Beach, Florida-based company is the largest renewable-energy company in the U.S. And it’s one you should keep an eye on.
First, NetEra Energy is likely to benefit from the presidency of Democrat Joe Biden who has said that he intends to make tackling climate change and weaning Americans off fossil fuels the central focus of his administration.
At the same time, NEE shareholders will likely benefit from the current rotation out of technology stocks and into value-oriented securities, as well as the broad recovery in the energy sector that is now underway.
NextEra Energy currently produces more energy from wind and solar power than any other company in the world. Not just the U.S., but the whole world.
A Closer Look at NEE Stock
Founded nearly 100 years ago, in 1925, NextEra Energy today has annual revenues of around $2o billion and 14,300 employees in the U.S. and Canada. With NEE stock currently valued around $73, the company has a market capitalization of $143 billion, making it the largest electric utility company in America.
At one point this year, NextEra Energy surpassed ExxonMobil (NYSE:XOM) in terms of market cap and became the biggest energy concern in the U.S.
Currently, NextEra Energy is operating on a hybrid model. The company is developing a growing number of renewable wind and solar energy products while, at the same time, operating the largest electric utility in the U.S. and managing fossil fuel plants for subsidiaries such as Florida Power & Light and Gulf Power.
NextEra Energy even operates some oil-based power generation. While the company is focusing its future on renewable energy sources, its current success is based largely on having operations in all aspects of the energy sector, say analysts.
The company is even positioned to benefit from the coming electrification of automobiles worldwide.
Stellar Results and a Stock Split
Analysts are gushing over NextEra Energy’s business model and results, pointing to the company as an example of the future direction the energy industry needs to move in. And NextEra Energy has been delivering for its customers and shareholders.
The company posted a 40% rise in its third-quarter profit ended Sept. 30. NextEra Energy also posted net income of $1.23 billion, or $2.50 per share, up from $879 million, or $1.81 per share, in the third quarter of 2019. NextEra has raised its guidance range by $0.20 per share and now expects adjusted earnings of $9.60 to $10.15 per share in 2021, spurred by a strong renewable energy market.
While it didn’t get nearly as much attention as the stock splits of technology giants Apple (NASDAQ:APPL) and Tesla (NASDAQ:TSLA), NextEra Energy executed a four-for-one stock split on Oct. 26 that brought its share price down to its current level of $77.75.
For investors looking to buy NEE stock, the post-split price provides an attractive entry point. Plus, NextEra Energy pays a quarterly dividend of $0.35 a share on a split adjusted basis and has been diligent about raising its dividend regularly.
Between 2004 and 2019, NextEra’s adjusted earnings per share (EPS) grew at a compound annual growth rate (CAGR) of 8.4% while its dividends grew at a CAGR of 9.4%.
Buy NEE Stock
There are really no downsides to buying NEE stock.
From the company’s current business model, expansion into renewable energy sources such as wind and solar, the favorable environment that’s likely under president-elect Biden, its split-adjusted stock price, dividend payments and positive earnings outlook, NextEra Energy has all the bases covered.
It is the leading energy company for the 21st Century and is streets ahead of its competitors.
Analysts, of course, are bullish on NEE stock. Among 15 analysts who cover the company, the averageprice target for the shares is $78.71, with a high target of $87 a share. As we close out 2020 and move into the New Year, NextEra Energy is a stock to add to every investors’ portfolio.
On the date of publication, Joel Baglole held shares of APPL and TSLA.
