Is NextEra Energy the Smartest Investment You Can Make Today?
NextEra Energy is a leader in all forms of clean energy.
The company is in an excellent position to capitalize on the expected surge in power demand.
It could continue to generate strong total returns for its shareholders.
10 stocks we like better than NextEra Energy ›
One of the smartest things you can do as an investor is focus on megatrends that should drive above-average growth in the coming years. The top companies focused on a major growth trend tend to deliver strong earnings growth and total returns over the long term.
U.S. power demand is becoming a massive growth trend. After barely rising over the last two decades, forecasters expect electricity demand in the country to surge 55% by 2040. Several catalysts will power this acceleration, including artificial intelligence (AI) data centers, the electrification of transportation, and the onshoring of manufacturing. This catalyst drives the view that the U.S. will need to add a staggering 450 gigawatts (GW) of new power generation capacity by 2030.
NextEra Energy (NYSE: NEE) is in a strong position to capitalize on this megatrend. Here's a look at whether the utility is one of the smartest investments you can make right now.
"NextEra Energy is the quintessential 'all-forms-of-energy' company," stated CEO John Ketchum on the first-quarter earnings conference call. He noted that his company knows "renewables and storage because we're a world leader in the space." NextEra also knows "gas because we operate the largest gas-fired fleet in America and have built more gas-fired generation than anyone over the last two decades," and "nuclear because we operate one of the largest fleets in the United States." Further, NextEra Energy knows "how to serve growth because we've been doing it for decades across the United States."
The company currently has 72 gigawatts of power generation capacity across the country. It's the largest electric utility in America and a leading North American clean energy company. NextEra's massive scale gives it a huge competitive advantage. Its years of experience in the development of renewable power have made it a leader in the sector. It's the No. 1 originator of renewable energy development projects among power and commercial and industrial customers, with a 20% share of the market.
NextEra Energy's leadership in the sector puts it in a strong position to grow its business and shareholder value in the future. The company plans to invest about $120 billion in American energy infrastructure over the next four years. It's investing that capital in renewable energy projects (more than 25 GW of projects currently in its backlog), energy transmission lines, and other energy infrastructure projects. The company expects these investments will help grow its adjusted earnings per share at or near the high end of its 6% to 8% annual target range through 2027. It will also support dividend growth of around 10% per share through at least next year.
The company's longer-term growth outlook is just as bright. NextEra Energy has a 300 GW pipeline of renewable and storage projects under development. Meanwhile, it partnered with gas turbine maker GE Vernova earlier this year to leverage their combined expertise and build new gas power generation. The companies expect to spend the next few years identifying projects they'll build and own to support large power purchasers like AI data centers. NextEra Energy is also looking to restart one of its dormant nuclear power plants and explore the potential of small modular reactor technology.
With so much power demand ahead, NextEra Energy could grow its earnings and dividends at above-average rates for years to come. That positions the company to create significant value for shareholders in the future. Over the past 20 years, the company has grown its adjusted earnings per share at a 9% compound annual rate while increasing its dividend at around a 10% yearly rate. These growth drivers have powered market-crushing total returns (over 15% annualized for NextEra compared to around 10% for the S&P 500).
NextEra Energy is a leader in producing clean power in the country. Its large scale and sector expertise put it in a strong position to capitalize on the expected future surge in energy demand. The utility could continue growing its earnings and shareholder value at an above-average rate in the future. While there are no guarantees its future returns will match its past success, NextEra looks like one of the smartest investments you can make these days.
Before you buy stock in NextEra Energy, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and NextEra Energy wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $642,582!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,879!*
Now, it's worth noting Stock Advisor's total average return is 975% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join .
See the 10 stocks »
*Stock Advisor returns as of May 19, 2025
Matt DiLallo has positions in NextEra Energy. The Motley Fool has positions in and recommends NextEra Energy. The Motley Fool recommends Ge Vernova. The Motley Fool has a disclosure policy.
Is NextEra Energy the Smartest Investment You Can Make Today? was originally published by The Motley Fool
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
Posthaste: Why the Canadian dollar is going up when the economy is going down
A funny thing has been happening to the Canadian dollar lately. Despite evidence that the economy is weakening, the currency has been going up, not down, rising 3 per cent against the U.S. dollar since President Donald Trump's Liberation Day. That's not usually how it works, but some strategists think this is more than just a temporary overshoot. Desjardins Group expects the divergence will continue to widen in coming months, with the loonie rising to 74 cents U.S. by the end of this year and to almost 77 cents U.S. by the end of the next. It was trading up at 73.08 this morning. The forecast is based on the U.S. dollar losing strength rather than the Canadian dollar gaining it, said Mirza Shaheryar Baig, a foreign exchange strategist with Desjardins. The loonie's performance against other major currencies has not been stellar. 'Net-net, a strong loonie is the result of a shift in global capital flows leading to a broadly weaker U.S. dollar,' he said. Since Liberation Day the U.S. dollar has become positively correlated with stocks. 'In other words, it has lost its safe haven appeal. This matters because many Canadian institutional investors who did not hedge the currency risk on their U.S. investments are now being forced to raise their hedge ratios,' said Shaheryar Baig. The outlook for the U.S. economy is also weakening. Coming out of the pandemic, it grew faster than other economies, but that has changed. Expectations for U.S. growth have dropped and are now in line with other advanced economies, he said. The Organisation for Economic Co-operation and Development warned last week that Trump's tariff war will sap global growth in 2025 and it gave the United States the biggest downgrade among G7 nations. The OECD sees its growth slowing sharply from 2.8 per cent in 2024 to 1.6 per cent this year, and 1.5 per cent next. Trump's tactics to raise the income share of American workers is also unnerving investors, said Shaheryar Baig. Telling Walmart Inc. 'to eat the tariffs' and threatening Apple Inc. with duties on products made out of the country does not help boost the profits investors are looking for. 'To many investors, American capitalism now resembles Chinese 'common prosperity,'' he said. Desjardins admits its forecast has risks. America dodged a widely expected recession in 2023 and its economy could surprise again. Carry trade in the U.S. dollar, which has the highest deposit yields in the G7, could also revive, he said. The downside of a strong Canadian dollar against the greenback is that it makes exports more expensive, a drag on Canada's already fragile economy. Desjardins believes this will force the Bank of Canada to cut its interest rate another 75 basis points to 2 per cent this year. to get Posthaste delivered straight to your manufacturing sector has been slammed by tariffs, but now new data shows that services, which makes up a much bigger share of the economy, are suffering too. S&P Global's Services PMI for May shows this sector is not only in contraction, but is also the weakest of all 14 countries covered, said National Bank of Canada economists. Earlier last week S&P Global's manufacturing PMI put Canada as the lowest among 30 countries. 'That's dead last in manufacturing and dead last in services, leaving Canada as clear outlier in this sample of key peers,' said National. Prime Minister Mark Carney will be in Toronto today to make an announcement related to 'defence and security priorities.' Today's Data: United States wholesale trade What is the bond market and why is everybody so worried about it? The robots are coming! 10 predictions on what AI means for your mortgage and home Canada's unemployment rate hits 7%, highest since 2016 outside the pandemic The bond market has been making headlines lately as Donald Trump's 'big beautiful' bill raises concern about the state of America's finances. But just what is the bond market, how does it work and why is it such a problem when investors get jittery about it? The Financial Post explains. Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at wealth@ with your contact info and the gist of your problem and we'll find some experts to help you out while writing a Family Finance story about it (we'll keep your name out of it, of course). Want to learn more about mortgages? Mortgage strategist Robert McLister's Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won't want to miss. Plus check his mortgage rate page for Canada's lowest national mortgage rates, updated daily. Visit the Financial Post's YouTube channel for interviews with Canada's leading experts in business, economics, housing, the energy sector and more. Today's Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff, The Canadian Press and Bloomberg. Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@ These three provinces are most at risk as cracks appear in Canada's economy Homeowners up for renewal are in for a wake-up call Sign in to access your portfolio
Yahoo
an hour ago
- Yahoo
Oklo Rallies on Seaport Buy Upgrade
Oklo (NYSE:OKLO) jumps 4.8% after Seaport Global upgraded the nuclear tech developer to Buy, citing strong project milestones and leadership enhancements. Seaport's Jeff Campbell set a $71 price target, arguing that Oklo's progress at the Idaho National Laboratory site and new CTO hire Pat Schweiger make it a standout in advanced nuclear. Warning! GuruFocus has detected 2 Warning Sign with OKLO. Oklo has wrapped up its drilling campaign at INL with a memorandum of agreement and an interface agreement with the Department of Energy, while also kicking off the NRC's Phase 1 combined license pre-application readiness assessment. The company has submitted a licensed operator topical report and is gearing up to file its licensing project plan for the Oklo Fuel Foundry, signaling management's confidence in regulatory momentum. Campbell flagged fuel availability as the key variable driving Oklo's upside, and noted the firm's eligibility for Defense Innovation Unit awards under the Advanced Nuclear Power for Installations programproof that Oklo has cleared technical gates and is vying to deploy its 15 MW Aurora microreactor at military bases. The upgrade comes after OKLO's stock surged 148% year-to-date, suggesting that fresh Buy-side conviction could fuel a second wave of gains. Why It Matters: As nuclear microreactors gain traction for remote power and defense use cases, Oklo's regulatory headway and DoE partnerships position it to capitalize on a growing demand for clean, resilient energy. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
an hour ago
- Yahoo
Lawmakers give US-flag shipping a cargo boost
WASHINGTON — The U.S. House of Representatives approved three bills on Monday that promote U.S. maritime interests, including a requirement that all cargo purchased by the U.S. government move on American ships with American crews. The Cargo Preference Act of 1954 requires that 50% of civilian agencies' cargo and agricultural cargo be carried on U.S.-flag vessels, with the U.S. Department of Transportation's Maritime Administration (Marad) being the lead agency managing cargo preference compliance. The American Cargo for American Ships Act would boost the 50% requirement to 100%. The legislation is supported by several U.S.-based maritime labor groups and U.S.-flag shipping companies, including the International Organization of Masters, Mates & Pilots and Hapag Lloyd USA. 'American cargo transported by American ships bolsters our economy, creates more jobs, and protects our supply chains,' said U.S. Rep. Salud Carbajal, D-Calif., the lead sponsor of the bill, in a press statement when he introduced the bill in March. The legislation, he said, 'will ensure that our maritime workforce remains strong and competitive, safeguards our national security by reducing dependence on foreign vessels, and reinforces America's position as a global leader in trade and commerce.' Carbajal noted in March that 106 U.S.-flag ships were participating in the U.S. foreign trades in 2012, according to Marad data, which dropped to 77 vessels in 2016. That number has since increased to 87 ships. The House also passed on Monday the Maritime Supply Chain Security Act, legislation that would allow Port Infrastructure Development Program grants, administered by Marad, to be used by ports and marine terminals to replace Chinese-made gantry cranes, including the software used to operate the cranes. In addition, the chamber passed the Secure Our Ports Act of 2025, which would bar Chinese, Russian, North Korean or Iranian state-owned enterprises from entering into contracts to own, operate or manage a U.S. port facility. The three bills now head to the Senate. Trump nominates Maersk executive to lead Maritime Administration House passes bill to counter Beijing's influence over global ports China in crosshairs of new ocean shipping reforms Click for more FreightWaves articles by John Gallagher. The post Lawmakers give US-flag shipping a cargo boost appeared first on FreightWaves.
