Although gas and oil are currently in the spotlight because of the Ukraine war, you should never forget: Renewable energies are the future. There is simply no way around it. Today I want to introduce you to a stock that has what it takes to become one of the biggest beneficiaries of the energy transition. Namely: NextEra Energy (NEE).
NextEra Is Paving The Way For The U.S. Energy Transition
The group is not only one of the leading electricity suppliers in the USA. It is also a pioneer of renewable energies. No other U.S. company can boast such an extensive portfolio of solar and wind power as NextEra. The company currently offers a total of 22 gigawatts of green electricity to its millions of customers in the USA.
And the company plans to double this capacity by 2024. NextEra therefore plays a central role in the energy transition in the USA. And this turnaround is currently very popular. After all, U.S. President Joe Biden announced a gigantic infrastructure program to get solar and wind power up to speed. NextEra therefore not only stands to benefit from lavish subsidies, but also from an almost immeasurable flood of orders.
Profit Targets Raised
So it’s no wonder that the company is currently optimistic about the future. Just a few days ago, NextEra raised its profit targets for the coming years. Accordingly, the group now expects an increase in earnings per share (EPS) of 6 to 8 percent annually until 2025.
This means that in 2025, NextEra could end up with EPS of $3.70 per share. That compares with $2.55 in 2021. The company justified the forecast increase primarily with the expansion of renewable energies and the associated higher margins.
Certainly, the Group is also likely to have kept an eye on the upcoming government subsidy program. Just a few weeks ago, President Biden reaffirmed his ambitious goals for the solar and wind industries. According to the White House, the solar industry in particular is to be promoted in order to give the sector security and prospects.
NextEra Moves Away From Fossil Fuels
NextEra is therefore likely to enjoy a boom. And not just in renewable energies themselves. The company is also active in the U.S. in the field of “green” hydrogen – the production of which in turn requires green electricity. In addition, the company maintains sites for energy storage via batteries.
Of course, NextEra has not yet completely abandoned fossil fuels. The company still produces large parts of its electricity from oil and gas – and also from nuclear power. Over the next few years, however, the company plans to at least steadily reduce its use of fossil fuels.
You can’t really do much wrong with NextEra. The group and its predecessor companies have been an integral part of the U.S. power supply for decades. Accordingly, the stock is relatively stable – in other words, a classic standard stock.
In addition, NextEra is a reliable dividend payer. The company has been continuously increasing its dividend payments for 25 years. And it plans to raise the dividend by a further 10 percent a year until 2024. So, especially in these times of crisis, this stock is definitely a kind of safe haven that can bring you long-term returns.