NextEra Energy is not a cheap stock, and it really never is, which is why investors with a growth bias shouldn’t wait for a market crash to jump aboard.
That means that it has been granted a monopoly in the markets it serves, but, in exchange, it must get its rates approved by the government.
This is actually a pretty good deal for the utility, because it generally means slow and consistent growth over time regardless of what’s going on in the stock market.
Where things start to get exciting is that NextEra is using this core business to help fund the build-out of a giant renewable power operation.
So it has clearly made excellent use of the “core and explore” business model, with the solid utility foundation providing a great base for expansion in the fast-growing renewable power sector.
The company currently has around 22 gigawatts of power in its portfolio, so the goal is basically to more than double the size of its renewable power fleet.
All of this investment is expected to result in adjusted earnings-per-share growth of between 6% and 8% a year over at least the next few years.
NextEra has increased its dividend annually for 27 consecutive years, making it a Dividend Aristocrat.
However, with a growing business in the growing renewable power sector, all backed by a solid electric utility operation, NextEra looks extremely well positioned for the future.
Sure, a market downturn might sting in the short term, but the long term looks like it will just get better and better.