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Can This Dividend Stock Grow Another 22%?

NextEra Energy (NYSE: NEE  ) reported earnings yesterday, just missing top-line estimates but pulling through on the bottom. Mr. Market didn't seem too riled up over revenue, with shares heading up 2%. This dividend growth stock has gained 21.7% over the past year, causing many investors to wonder when this bull is going to run out of steam. With the latest numbers in, here's what you need to know.

Number crunching
NextEra's revenue clocked in at $3.88 billion, 5.9% above last year's Q2 and a smidgen ($10 million) below analyst estimates.

Fallings sales are no news for utilities, and in such a regulated industry, investors should be equally, or even more, concerned with bottom-line numbers. Adjusted EPS came in at $1.46 for Q2 2013, a whopping 14% above predictions and $0.20 more than NextEra managed in Q2 2012.

Over the past five years, NextEra sales have dropped off 12%, but the utility has made more from less with a 13% increase in adjusted EPS.

NEE Revenue TTM Chart

NEE Revenue TTM data by YCharts

Fueling fundamentals
NextEra has managed some major wins this past quarter. Its nuclear modernization project came in under budget, ahead of schedule, and with 100 more MW than previously expected. At the same time, the company kept its title as the nation's largest producer of renewable energy by continuing to increase economies of scale with new contracted renewable assets.

On the regulated side, NextEra managed to maintain 11% return on equity for its Florida Power & Light utility, an impressive feat as other regulatory bodies have pushed back on recent rate requests. Duke Energy (NYSE: DUK  ) announced last week that it will revise its Carolinas rate request down nearly 50%, cutting around $100 million off its retail revenue.

The big news on the Wall Street block is NextEra's new $3 billion joint-venture partnership with Spectra Energy (NYSE: SE  ) . The two utilities are teaming up to add a third major natural gas pipeline to Florida's infrastructure. NextEra hopes to receive regulatory approval by the end of the year, and will front $1 billion for the joint venture, along with $550 million for its own energy center connection.

Source: NextEra Q2 Earnings presentation 

Growth + dividend?
For most investors, utilities fall ubiquitously into the dividend stock category. But with a 3.1% annual yield, NextEra trails far behind most of its competitors. Its yield pales in comparison to the industry average of 3.8%, but NextEra doesn't seem to mind. As stock markets fill up with cash, many utilities are distributing funds straight back to investors. Duke Energy increased its dividend last month, and Wisconsin Energy (NYSE: WEC  ) recently announced that it is increasing its own distribution ahead of schedule. A 12.5% hike will hit Wisconsin Energy investors' portfolio profits this quarter, versus the previously expected Q1 increase.

NextEra's rejection of big dividends in place of growth opportunities hasn't gone unnoticed, and its stock trades at a premium to competitors on pretty much every metric monitored. Overvaluation is a real fear in this bullish market, but it's no reason to not invest.

Will NextEra keep pulling profits?
The utility has enjoyed rock-solid regulated earnings, while continually taking advantage of renewable energy opportunities. With its recent foray into natural gas and transmission, the utility's operations are becoming increasingly diversified. Since I first gave NextEra my thumbs-up and made an outperform call on my Motley Fool CAPS page, its shares have moved up 32% (12% more than the S&P 500). (SNPINDEX: ^GSPC  ) With solid fundamentals and a steadily optimistic outlook, I think this dividend stock still has room to grow.

NextEra's not the only dividend stock out there, and our analysts have been working hard to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of the only nine that fit the bill. Diversifying beyond energy-based dividend stocks is an absolute must, and this report tells all. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.

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