Over the past year, NextEra Energy ( NEE 0.48%) shares have dropped by 12%. By comparison, the S&P 500 has surged 20% in the same timeframe. The recent decline in NextEra's stock has lifted its dividend yield above 3%, which is more than twice the S&P 500’s current yield of 1.2%.
Here’s why now could be an ideal time for investors to consider this outstanding energy stock.
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The growth story remains strong
There’s little justification for NextEra Energy’s share price weakness over the past year. The company continues to grow rapidly, posting a 9.4% increase in adjusted earnings per share during the second quarter. NextEra is also on pace to meet its full-year earnings guidance.
The business has reaffirmed its long-term goal to grow adjusted earnings per share by 6% to 8% annually through 2027, using last year as a base. CEO John Ketchum has consistently emphasized that they would be “disappointed if we are not able to deliver financial results at or near the top of our adjusted earnings per share expectations ranges in each year through 2027.” This solid growth outlook backs NextEra’s plan to boost its dividend by about 10% a year, at least through next year.
In addition, the outlook for the company’s long-term expansion remains very promising. Experts are predicting a sharp increase in electricity demand over the coming years, fueled by expanding AI data centers, the shift to electric vehicles, and the return of manufacturing to the U.S. This will drive strong demand for renewable energy sources. As one of the top developers in renewables, NextEra Energy is well positioned to capitalize on this trend.
An appealing buying opportunity
With its strong dividend, clear growth trajectory, and potential upside from increasing electricity consumption, NextEra Energy’s recent share price weakness appears to offer an attractive entry point.
