An In-Depth Look at the Upcoming Dividend and Historical Performance
NextEra Energy Inc (NEE, Financial) recently announced a dividend of $0.52 per share, payable on 2024-06-17, with the ex-dividend date set for 2024-06-03. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into NextEra Energy Inc's dividend performance and assess its sustainability.
What Does NextEra Energy Inc Do?
NextEra Energy's regulated utility, Florida Power & Light, is the largest rate-regulated utility in Florida. The utility distributes power to nearly 6 million customer accounts in Florida and owns 34 gigawatts of generation. FP&L contributes roughly 70% of NextEra's consolidated operating earnings. NextEra Energy Resources, the renewable energy segment, generates and sells power throughout the United States and Canada with more than 30 GW of generation capacity, including natural gas, nuclear, wind, and solar.
A Glimpse at NextEra Energy Inc's Dividend History
NextEra Energy Inc has maintained a consistent dividend payment record since 1986. Dividends are currently distributed on a quarterly basis. NextEra Energy Inc has increased its dividend each year since 1995. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 29 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down NextEra Energy Inc's Dividend Yield and Growth
As of today, NextEra Energy Inc currently has a 12-month trailing dividend yield of 2.40% and a 12-month forward dividend yield of 2.57%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, NextEra Energy Inc's annual dividend growth rate was 10.10%. Extended to a five-year horizon, this rate increased to 10.90% per year. And over the past decade, NextEra Energy Inc's annual dividends per share growth rate stands at an impressive 11.40%.
Based on NextEra Energy Inc's dividend yield and five-year growth rate, the 5-year yield on cost of NextEra Energy Inc stock as of today is approximately 4.03%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2024-03-31, NextEra Energy Inc's dividend payout ratio is 0.58.
NextEra Energy Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks NextEra Energy Inc's profitability 7 out of 10 as of 2024-03-31, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. NextEra Energy Inc's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and NextEra Energy Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. NextEra Energy Inc's revenue has increased by approximately 14.80% per year on average, a rate that outperforms approximately 72.43% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, NextEra Energy Inc's earnings increased by approximately 40.20% per year on average, a rate that outperforms approximately 88.84% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 11.40%, which outperforms approximately 70.82% of global competitors.
Next Steps and Conclusion
Considering NextEra Energy Inc's consistent dividend payments, robust dividend growth rate, sustainable payout ratio, strong profitability, and solid growth metrics, the company remains an attractive option for investors seeking stable dividend income. As the energy sector continues to evolve, NextEra Energy Inc's focus on renewable sources positions it well for future growth, potentially leading to continued dividend increases. Investors should consider these factors when evaluating the company's long-term value. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
