NextEra Energy: The Largest U.S. Utility with a Clean Energy Twist

NextEra Energy is the largest publicly-traded utility in the world and a huge long-term investment opportunity for growth, income, and growth and income investors. The company is a regulated electricity operation in Florida and also has a large solar and wind power business, taking advantage of the global shift towards cleaner and renewable energy sources. Electricity demand is expected to increase significantly, driven by AI, data centers, and electric vehicles, making NextEra Energy a solid investment choice.

NextEra Energy, trading as NEE, stands as the largest publicly-traded utility in the world, boasting a market capitalization exceeding $150 billion [1]. This scale provides the company with a strategic advantage, enabling it to make substantial investments in infrastructure and technology that smaller utilities might struggle to fund.

At the heart of NextEra’s success is its subsidiary, Florida Power & Light (FPL), which serves over 6 million customers, making it the largest electric utility in the United States [1]. FPL’s commitment to renewable energy, particularly solar, has been pivotal. With the country’s largest utility-owned solar energy portfolio, FPL has expanded its capacity to serve more than 6 million customers while keeping costs low for its customers, resulting in improved customer satisfaction and retention [1].

NextEra Energy Resources, another key segment, operates a robust renewable energy portfolio with approximately 38 gigawatts (GW) of power generation and storage assets [1]. This division capitalizes on the increasing demand for clean energy from utilities and corporate entities, positioning NextEra to capture a significant share of the growing renewable energy market.

NextEra Energy has demonstrated remarkable growth, with a compound annual growth rate (CAGR) of 8.3% in adjusted earnings per share since 2007 and nearly 10% CAGR in dividends over the same period [1]. Shareholders have seen their investments double approximately every eight years, underscoring the company’s capacity to provide robust returns.

Looking ahead, NextEra Energy plans to invest $120 billion in U.S. energy infrastructure over the next four years [1]. This ambitious strategy aims to secure predictable returns facilitated by government-regulated rate structures and long-term contracts, positioning the company to grow adjusted earnings per share in the upper range of its annual target of 6% to 8% through at least 2027.

The increasing demand for electricity, projected to rise by 55% by 2040, driven by factors including the expansion of data centers, electrification of transportation, and onshoring of manufacturing activities, favors renewable energy sources such as solar and wind [1]. NextEra Energy, with its established presence in renewable energy, is well-positioned to capture a significant share of these new capacity projects.

NextEra Energy’s strategic advantage lies in its commitment to clean energy trends and investments in renewable technologies. This forward-thinking approach ensures the company remains adaptable in an evolving market landscape, solidifying its role as a pivotal player in addressing future energy needs and policy goals.

In conclusion, NextEra Energy’s strong growth trajectory, backed by a commitment to innovation and excellence, positions it as a compelling investment opportunity for long-term investors. As demand for electricity soars and the transition to sustainable energy continues, NextEra Energy’s strategic investments in energy infrastructure and renewable resources make it a solid choice for growth and income investors.

References:
[1] https://growthshuttle.com/nextera-energy-a-utility-powerhouse-with-unmatched-growth-potential/