Forget the appeal of companies that promise groundbreaking innovation. While some of these may actually offer handsome returns, the most beat investors know that the path to greater personal wealth is largely paved with proven stocks that can provide a solid foundation for their portfolio. nextera energy(NYSE: No).
But it’s not just the fact that Nextera Energy Stock has surpassed the market for the last 20 years and is an attractive attraction. With its management’s unwavering commitment to rewarding shareholders (its dividend is currently positive yields of over 3%) and a conservative business model, Nextera Energy appeals to those looking to strengthen their portfolio. I love so much about stocks, so it’s worth asking if the company has the power to thrive in the long term.
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Nextera Energy, one of North America’s largest regulated utility companies, generates revenue primarily from two businesses: Florida Power and Optical (FPL) and Nextera Energy Resources. With over 6 million customers, FPL primarily serves retail customers, while Nextera Energy Resources operates renewable energy assets across the United States.
The conservative nature of the company’s business has been demonstrated in two different ways. Because FPL is a regulated utility, Nextera Energy has a certain rate of return guaranteed by the Florida Public Services Commission operating in Sunshine.
Similarly, Nextera Energy Resources represents a low-risk business. From solar power to battery storage, from nuclear power to nuclear power, Nextera Energy Resources has a diverse portfolio Clean Energy Assets A total of approximately 38 gigawatts (GW). The company inked long-term power purchase agreements (PPAs) with customers in the wholesale power market that sells energy, capacity, credit and other products.
The nature of Nextera Energy’s business model should brighten up the eyes of investors looking for a reliable company, but the skilled ability to generate profits from management will make them truly shine. Average year Earnings before interest, taxes, depreciation and amortization (EBITDA) At a 51.8% margin from 2020 to 2024, Nextera Energy consistently demonstrates superior profitability on an EBITDA margin basis over the past decade compared to its closest peers based on market capitalization. Southcompany and DukeEnergy.
Of course, I remember that just because the company has been successful in these respects over the past decade does not guarantee similar growth over the next decade. But it is certainly an auspicious sign worthy of recognition.
Additionally, Nextera Energy has an average payout ratio of 81% over the past five years, and the company has been highly valuing dividends for over 30 consecutive years. All of these should help ease concerns.
To ensure Nextera Energy achieves growth next year, investors can expect management to pull some levers. One would certainly petition the Florida Public Service Commission to raise rates for regulated utility customers. Already, the company has proposed to raise the base rates by around $1.6 billion and $0.9 billion in 2026 and 2027, respectively.
Another growth option for the company is the advancement of the project, currently located in the Nextera Energy Resources backlog. In 2024, Nextera Energy Resources added wind power capacity of approximately 1.4 GW, solar generation capacity of 2.5 GW, and battery storage capacity of 0.8 GW. As of late April 2025, Nextera Energy had a backlog of 300 GW renewable energy projects in the pipeline, totaling 28 GW and 300 GW.
Finally, the company can grow through acquisitions, as it has done repeatedly in the past. For example, in 2019, Nextera Energy added about 470,000 customers when it acquired Southern Company’s regulated power business Gulf Power, which operates in northwest Florida, for about $4.4 billion. With the growth of its power transmission business, Nextera Energy completed its $505 million acquisition of Gridliance in 2021.
From the opportunity to expand its renewable energy portfolio to its ability to grow its regulated electricity business through rising rates and acquisitions, it is clear that Nextera Energy has the ability to continue growing for the next few years. Also, stock trading in early June has 11.4x operating cash flow and a discount of 14.9 on average cash flow multiples, which appears to be the best time to click on the buy button.
Consider this before purchasing stock at Nextera Energy.
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Scott Levine There is no position in any of the stocks mentioned. Motley Fool has a job at Nextera Energy. Miscellaneous fools recommend Duke energy. To Motley’s fool Disclosure Policy.
