The world’s largest clean energy utility provider NextEra Energy Inc (NYSE: NEE) saw shares close at an all-time high, finishing Wednesday up 4.1%.
The utilities sector in the US caught up with broader market gains on Wednesday, with some of the leading utility providers (such as NextEra) benefitting the most from the rally.
If investors want a relatively reliable way to invest in the future of clean energy, I can’t think of a better company than NextEra.
The utility provider, which provides electricity to households in the state of Florida in the US, also happens to be the world’s largest generator of wind and solar energy.
Given it’s a rate-regulated utility, the income streams it generates are predictable. Furthermore, the company is leading the way in developing battery storage for renewable energy – so that demand can be met even when the wind stops blowing and the sun stops shining.
Its track record speaks for itself. Even though the utility’s dividend yields a relatively low 1.9%, NextEra has been growing its payout at a strong pace.
It has grown its dividend at a compound annual growth rate (CAGR) of 9.4% over the past 16 years. Not only that but its total return over the past 10 years has amounted to 530%, more than doubling the S&P 500’s 257% return over the same period.
The stock is a “slow and steady” grower but I think investors can be confident that NextEra will continue to produce market-beating returns as we continue to transition to a greener future.
This material is categorised as non-independent for the purposes of CGS-CIMB Securities (Singapore) Pte. Ltd. and its affiliates (collectively “CGS-CIMB”) and therefore does not provide an impartial or objective assessment of the subject matter and does not constitute independent research. Consequently, this material has not been prepared in accordance with legal requirements designed to promote the independence of research. Therefore, this material is considered a marketing communication.
This material is general in nature and has been prepared for information purposes only. It is intended for circulation amongst CGS-CIMB’s clients generally and does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this material. The information and opinions in this material are not and should not be construed or considered as an offer, recommendation or solicitation to buy or sell the subject securities, derivative contracts, related investments or other financial instruments or any derivative instrument, or any rights pertaining thereto. CGS-CIMB have not, and will not accept any obligation to check or ensure the adequacy, accuracy, completeness, reliability or fairness of any information and opinion contained in this material. CGS-CIMB shall not be liable in any manner whatsoever for any consequences (including but not limited to any direct, indirect or consequential losses, loss of profits and damages) of any reliance thereon or usage thereof.
Tim, based in Singapore but from Hong Kong, caught the investing bug as a teenager and is a passionate advocate of responsible long-term investing as a great way to build wealth.
He has worked in various content roles at Schroders and the Motley Fool, with a focus on Asian stocks, but believes in buying great businesses – wherever they may be.
In his spare time, Tim enjoys running after his two year-old son, playing football and practicing yoga.