NextEra Energy is more than just an electric utility: it is a big player that has transformed the energy landscape by integrating innovation with proven capacity to adapt to the market’s demand. With a focus on sustainable growth, NEE should be on every investor’s list of must-haves in the portfolio.
The company is a Juno Beach, Florida-based firm that deals with electric power and energy infrastructure. It has aggressively pursued renewable energy and produces the most renewable energy from wind and solar sources. Hence, it occupies an elemental position in the country’s clean energy transition.
The core business activities of NextEra Energy involve the generation of electricity from nuclear sources, natural gas, wind, and sun. It further engages in electric transmission, distribution, and energy storage. The firm’s revenue comes from selling electricity to residential, commercial, and industrial customers, wholesale sales of power, and investments in energy infrastructure.
From an individual consumer to vast industrial groups, utility companies, and government departments, NEE serves a wide spectrum of customers. The end market focuses on seekers of reliable electricity supply, especially in areas concentrating on sustainable energy solutions. The subsidiaries, like Florida Power & Light (FPL), bring new energy solutions since they are environmentally friendly companies.
The company’s 8% average annual dividend growth over 25 years is impressive. Where things get fascinating, though, is when the S&P 500 plummeted by 29% and the utility benchmark fell by 19%, NextEra delivered an incredible 14%. This is the kind of performance that turns heads and proves this is not your average utility – it is a powerhouse of innovation and stability. Investors that look for low volatility and investment safety will love this stock.
I am optimistic about the future of NextEra. Its leadership in renewable energy, with this segment set to become its primary revenue generator, is at par with global trends and aspirations toward sustainability. And that’s not hype; it is based on real numbers.
Florida Power & Light, its flagship utility, has shown incredible operational efficiency in lifting profit margins from 10% to over 25%. With solid dividend growth, a strong business model, and a massive footprint in renewable energy, NextEra stands out as the go-to choice for investors seeking stability and upside.
NEE is not on our latest list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 69 hedge fund portfolios held NEE at the end of the second quarter which was 73 in the previous quarter. While we acknowledge the potential of NEE as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NEE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
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