Updated 3/11/2025
NextEra Energy (NYSE: NEE) is one of the largest electric utility companies in the U.S., best known for its leadership in renewable energy. It operates through two key segments: Florida Power & Light (FPL), its traditional utility business, and NextEra Energy Resources, which focuses on clean energy solutions like wind and solar.
For dividend investors, NextEra has been a consistent performer, offering both steady payouts and long-term dividend growth. While utilities are typically seen as stable income plays, NextEra sets itself apart with an aggressive push into renewables. That growth potential makes it more than just a defensive stock—it’s a mix of reliability and innovation.
Let’s take a closer look at its dividend strength, financial health, and whether it’s a smart choice for income investors.
🔑 Key Dividend Metrics
📌 Forward Dividend Yield: 3.06%
📌 Trailing 12-Month Dividend Yield: 2.70%
📌 5-Year Average Dividend Yield: 2.29%
📌 Annual Dividend Payout: $2.27 per share
📌 Payout Ratio: 61.13%
📌 Dividend Growth Streak: 29+ years
📌 Most Recent Dividend Increase: 10% (2024)
📌 Ex-Dividend Date: February 28, 2025
📌 Next Dividend Payment Date: March 17, 2025
Dividend Overview
NextEra’s dividend track record is impressive. With nearly three decades of consecutive increases, it’s a company that income investors can count on. The current forward yield of 3.06% is slightly higher than its historical average, suggesting that the stock might be offering a better-than-usual entry point.
The payout ratio of 61.13% is right in the sweet spot—high enough to provide a solid income stream but low enough to leave room for further growth. Unlike some utility stocks that max out their payouts, NextEra still has room to reinvest in future expansion while rewarding shareholders.
One of the standout aspects of NextEra’s dividend strategy is its growth rate. Many traditional utility companies increase their dividends by just a few percentage points each year. NextEra, on the other hand, has been raising its payout at a much faster clip—around 10% annually. That kind of growth is rare in the sector.
Dividend Growth and Safety
The big question for investors: Can NextEra keep this pace of dividend growth going?
Looking at the numbers, the company is in a strong position. Earnings remain solid, with a trailing price-to-earnings (P/E) ratio of 21.97 and a forward P/E of 20.28. That suggests earnings are growing enough to support continued dividend increases.
Cash flow is another key factor. NextEra generated $13.26 billion in operating cash flow, which is plenty to cover dividends. However, negative levered free cash flow (-$14.17 billion) is something to keep an eye on. It reflects the heavy investment NextEra is making in new projects, especially in the renewable energy space.
While some investors might worry about these capital expenditures, they’re also what sets the company apart. The long-term transition to clean energy should ultimately drive profitability, but it does require patience.
The regulated utility segment, Florida Power & Light, provides a stable revenue base that helps balance out some of the risks associated with large-scale renewable energy investments. That’s one of the main reasons NextEra has been able to sustain its dividend growth while expanding aggressively.
Chart Analysis
Price Action and Trend
The stock has been in a downtrend since reaching its peak in late 2024. It made several attempts to recover but has struggled to gain sustained momentum. The recent price action shows a rally towards the 200-day moving average, but it failed to break above it and is now pulling back slightly.
The 50-day moving average is still below the 200-day moving average, which is a bearish signal, but the recent price movement suggests a potential reversal attempt. The stock recently tested the 200-day moving average and rejected it, which means it still faces resistance at higher levels.
Moving Averages
The 50-day moving average has been sloping downward for months, reflecting the longer-term downtrend. However, the stock has been making higher lows since the start of 2025, hinting at a possible shift in sentiment. The price briefly crossed above the 50-day moving average, which is a short-term positive sign, but it remains to be seen if it can hold above that level.
The 200-day moving average is flattening, which suggests that the long-term trend may be stabilizing. If the stock can reclaim this level and sustain a move above it, sentiment could turn more positive.
Volume Activity
There has been an uptick in volume over the past few trading sessions, especially on green days. This suggests some accumulation, as buyers are stepping in at lower levels. The spike in volume near the recent high indicates that there was selling pressure at the 200-day moving average, which explains the price rejection.
If volume remains strong on up days and weak on down days, it could indicate that buyers are regaining control. However, if heavy selling volume picks up, it could suggest another leg down.
Relative Strength Index (RSI)
The RSI is trending upward but has not yet reached overbought levels. This suggests that there is still room for the stock to move higher before it becomes overheated. If the RSI crosses above 70, it could indicate that the stock is overextended and due for a pullback.
On the flip side, if the RSI starts rolling over while the stock fails to make new highs, it could be a sign of weakening momentum. Watching whether RSI remains above the midline or starts turning lower will provide clues about the stock’s next move.
Key Support and Resistance Levels
The stock recently tested resistance near 75, which aligns with the 200-day moving average. This will be the key level to watch in the near term. A break above this level with strong volume could open the door for a larger move higher.
On the downside, support is near the 70 level, which has been tested multiple times in recent months. If the stock pulls back and holds this level, it could provide a base for another move higher. A break below 70 would indicate a loss of momentum and could lead to further downside pressure.
Recent Candle Patterns
The last five candles show some volatility, with both long wicks and strong price swings. This suggests that there is a battle between buyers and sellers at current levels. The most recent candle shows a rejection near the highs, which means sellers stepped in at resistance.
If the next few candles show smaller bodies and lower volume, it could indicate consolidation before another move. If there is another strong rejection at resistance, it might suggest that sellers are still in control.
Analyst Ratings
📈 Scotiabank – On December 12, 2024, Scotiabank raised its price target for NextEra Energy from $92.00 to $96.00, assigning a sector outperform rating. This upgrade was driven by the bank’s positive outlook on NextEra’s strategic initiatives and its leadership in renewable energy projects. Analysts see the company’s aggressive expansion into clean energy as a strong competitive advantage, positioning it well for future growth.
📊 Morgan Stanley – On January 23, 2025, Morgan Stanley increased its price target from $93.00 to $94.00, maintaining an overweight rating. The firm pointed to NextEra’s robust project pipeline and its ability to capitalize on the growing demand for clean energy solutions. Analysts also highlighted the company’s efficiency in scaling renewable operations while maintaining stable profitability.
⚠️ JPMorgan Chase & Co. – On January 27, 2025, JPMorgan lowered its price target from $99.00 to $90.00, maintaining a neutral stance. The downgrade was largely due to concerns over rising operational costs and potential challenges in the renewable energy sector that could impact the company’s profit margins. Analysts cautioned that higher interest rates and inflationary pressures could slow down the company’s aggressive expansion plans.
🔻 Evercore ISI – Also on January 27, 2025, Evercore ISI cut its price target from $84.00 to $79.00, assigning an in-line rating. The firm expressed caution regarding NextEra’s recent financial performance, particularly the decline in revenue from its renewable energy segment. Analysts noted that while the long-term outlook remains strong, near-term headwinds such as project delays and policy uncertainties could weigh on growth.
📌 The consensus 12-month price target for NextEra Energy currently stands at $85.92, suggesting a potential 16.05% upside from the current share price. Analysts remain split between those who see NextEra’s long-term clean energy strategy as a major strength and those who are concerned about the impact of rising costs and economic headwinds.
These mixed ratings reflect both the optimism surrounding NextEra’s leadership in the renewable energy space and the caution related to macroeconomic pressures and operational execution. Investors will be watching closely to see if the company can maintain its growth trajectory while navigating these challenges.
Earnings Report Summary
NextEra Energy just dropped its latest earnings report, and while there were some bumps along the way, the overall picture still looks solid. The company continues to position itself as a major player in the clean energy space, but the latest numbers show a mix of wins and challenges.
Quarterly Performance
For the fourth quarter of 2024, NextEra pulled in $5.39 billion in revenue, which came in lower than what analysts were expecting. That shortfall was mostly due to higher operating expenses and a one-time $845 million loss tied to an investment in one of its subsidiaries. Despite this, the company still managed to post earnings of $1.20 billion, or 58 cents per share, which was nearly flat compared to the same quarter last year.
Looking at the bigger picture, the full-year numbers tell a more positive story. Adjusted earnings per share came in at $3.43 for 2024, which is an 8% increase from the previous year. That’s a strong showing, especially when you consider the company has maintained a double-digit earnings growth rate since 2021.
What’s Driving the Numbers?
Florida Power & Light (FPL), NextEra’s regulated utility business, saw an 8% drop in revenue during the quarter. However, the company was able to cut costs in its operations, saving billions compared to the average utility provider. This focus on efficiency helped offset some of the revenue decline.
NextEra’s renewable energy arm, NextEra Energy Resources (NEER), had a rough quarter in terms of revenue, dropping 45.5%. But the long-term outlook remains bright. The company added over 12 gigawatts of new projects to its pipeline in 2024, a record-breaking year for clean energy expansion. The demand for renewable power continues to grow, driven by everything from data centers to residential solar installations.
Looking Ahead
NextEra isn’t slowing down anytime soon. The company is planning to invest around $120 billion over the next four years to expand its clean energy infrastructure. That includes adding over 5 gigawatts of new solar capacity and another 3.4 gigawatts of battery storage between 2026 and 2029.
As for 2025, NextEra reaffirmed its profit forecast, with expectations for earnings per share to land between $3.45 and $3.70. That’s slightly below what analysts were hoping for, but the long-term strategy still looks strong.
While the latest report showed some challenges, NextEra continues to make big moves in the renewable energy space, and its long-term prospects remain compelling.
Financial Health and Stability
While NextEra is a well-run company, it does carry a lot of debt—something common among utilities but still worth noting.
Key financial metrics:
- Total Debt: $83.56 billion
- Debt-to-Equity Ratio: 137.3%
- Current Ratio: 0.47
- Return on Equity: 9.51%
The debt load is significant, especially compared to some peers. However, utilities operate differently than most companies. Because they have highly predictable revenue, they can manage high levels of debt more effectively.
The low current ratio (0.47) suggests short-term liquidity isn’t as strong as some might like, but again, this isn’t unusual for a company in this space. The key is whether NextEra can continue managing its debt efficiently in a rising-rate environment. So far, it has done a solid job, but investors should watch how it handles refinancing in the coming years.
Valuation and Stock Performance
NextEra has historically been one of the more expensive utility stocks, and that premium valuation reflects its growth potential.
- Current Price: $74.03
- 52-Week Range: $58.88 – $86.10
- Price-to-Earnings (P/E): 21.97 (trailing), 20.28 (forward)
- Price-to-Book Ratio: 3.04
The stock is currently trading slightly below its 200-day moving average ($75.76) but above its 50-day moving average ($70.57). This suggests some stabilization after a recent pullback.
Compared to traditional utilities, NextEra’s valuation might seem high, but that’s because it operates more like a growth company than a typical slow-moving utility. The real question for investors is whether they’re comfortable paying a premium for that potential.
For those looking for a deep-value play, the stock might need to drop a bit further before becoming a clear bargain. However, for long-term dividend growth investors, paying up for a quality company with strong prospects isn’t necessarily a bad thing.
Risks and Considerations
No investment is without risks, and while NextEra is a solid company, there are a few factors investors should consider.
🔹 Interest Rate Sensitivity – As a capital-intensive business, NextEra relies on borrowing. Rising interest rates could make refinancing more expensive and slow growth.
🔹 Regulatory Risks – Utility companies are subject to strict regulations, and any changes in policies could impact NextEra’s operations and profitability.
🔹 High Debt Load – With a debt-to-equity ratio of 137%, the company must carefully manage its obligations to avoid financial strain.
🔹 Renewable Energy Execution – While renewables are a growth driver, they come with risks. Project delays, cost overruns, or shifts in government incentives could impact long-term plans.
🔹 Valuation Concerns – The stock isn’t cheap, and if earnings growth slows, the market may not be willing to continue paying a premium.
Final Thoughts
NextEra Energy is one of the most unique plays in the utility sector. It offers the stability of a traditional utility while also positioning itself as a leader in renewable energy. For investors focused on dividend growth, it’s one of the most reliable names out there.
The strong track record of dividend increases, solid earnings, and commitment to clean energy make it appealing for long-term income investors. However, it does carry some risks, particularly in terms of debt and valuation.
For those willing to ride out some volatility, NextEra offers a rare combination of income, growth, and innovation. The big question for investors is whether they believe in the long-term renewable energy shift—and whether they’re willing to pay a premium for a company at the forefront of that movement.
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