What happened

Shares of NextEra Energy (NYSE:NEE) surged more than 5% by 10:45 a.m. EDT on Tuesday. Powering the utility stock was news it was splitting its shares and an update to its growth forecast. 

So what

NextEra Energy unveiled plans to make its high-priced stock (shares are approaching $300 apiece after today's rally) more accessible to the average investor. The utility will enact a 4-for-1 split, which it expects to complete on Oct. 27. Stock splits have become increasingly popular this year after tech giants like Apple and Tesla made headlines by splitting their stocks, which helped fuel more gains before the recent sell-off in tech stocks. 

A person in a suit with an outstreched hand that has a bright light and upward chart coming out of it.

Image source: Getty Images.

While NextEra's stock split won't create any tangible value for investors, its other announcement should. The company said it now expects its 2021 earnings per share to come in $0.20 per share (pre-split) above its prior forecast. The company also anticipates growing its earnings per share in 2022 and 2023 at a 6% to 8% annual rate off that higher expected base. This updated forecast not only increases its near-term earnings outlook, but also extends it for another year. Powering the faster-paced growth is its strong execution and an excellent environment for developing renewable energy projects. 

Now what

NextEra Energy has an excellent track record for generating above-average earnings and dividend growth. That has powered a steady upward trend in its stock price, which put it out of reach for some investors. With the split, more investors will be able to afford shares. Meanwhile, with its growth forecast accelerating, it's an even better long-term opportunity for all portfolio sizes.