NextEra Energy, Inc. (NEE), Duke Energy Corp (DUK), Spectra Energy Corp. (SE): Can This Dividend Stock Grow Another 22%?

Growth + dividend?
For most investors, utilities fall ubiquitously into the dividend stock category. But with a 3.1% annual yield, NextEra trails far behind most of its competitors. Its yield pales in comparison to the industry average of 3.8%, but NextEra doesn’t seem to mind. As stock markets fill up with cash, many utilities are distributing funds straight back to investors. Duke Energy Corp (NYSE:DUK) increased its dividend last month, and Wisconsin Energy Corporation (NYSE:WEC) recently announced that it is increasing its own distribution ahead of schedule. A 12.5% hike will hit Wisconsin Energy Corporation (NYSE:WEC) investors’ portfolio profits this quarter, versus the previously expected Q1 increase.

NextEra Energy, Inc. (NYSE:NEE)’s rejection of big dividends in place of growth opportunities hasn’t gone unnoticed, and its stock trades at a premium to competitors on pretty much every metric monitored. Overvaluation is a real fear in this bullish market, but it’s no reason to not invest.

Will NextEra keep pulling profits?
The utility has enjoyed rock-solid regulated earnings, while continually taking advantage of renewable energy opportunities. With its recent foray into natural gas and transmission, the utility’s operations are becoming increasingly diversified. Since I first gave NextEra my thumbs-up and made an outperform call on my Motley Fool CAPS page, its shares have moved up 32% (12% more than the S&P 500). With solid fundamentals and a steadily optimistic outlook, I think this dividend stock still has room to grow.

The article Can This Dividend Stock Grow Another 22%? originally appeared on Fool.com and is written by Justin Loiseau.

Fool contributor Justin Loiseau has no position in any stocks mentioned, but he does use electricity. You can follow him on Twitter, @TMFJLo, and on Motley Fool CAPS, @TMFJLo.The Motley Fool recommends Spectra Energy. and Wisconsin Energy.

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