NextEra Energy (NEE 0.04%) is an odd duck in the normally boring utility sector, given that it has increased its dividend at an incredible 10% clip over the past decade. That's massive for a utility, but isn't an anomaly for the company, which expects to grow the disbursement at roughly the same amount through at least 2024. Here's where NextEra will be in three years if everything works out as planned.

The dividend

It makes sense to start with the dividend here. First, NextEra Energy is a Dividend Aristocrat with over 25 years of annual dividend increases under its belt. That's not uncommon in the utility space, but it is still an impressive showing of support for income investors. As noted, the dividend has grown at an annualized rate of more than 10% over the past 10 years, but that rate was around 11% over the trailing three- and five-year periods. This utility is a dividend machine.

A child playing with a solar panel.

Image source: Getty Images.

With the current promise of 10% annual dividend hikes through 2024, that suggests that the dividend will increase from $1.70 per share per year at the current run rate to something in the $2.25 per share range. Given the current stock price, that would take the yield on purchase from around 1.9% today to 2.5% in three years' time. That's a pretty pleasing jump.

While that's a fine set of numbers to look at, the real question is: How does NextEra Energy plan to do this? The answer is: By spending as much as $95 billion on capital investments between 2022 and 2025. That's a lot of money.

Where's the money going?

NextEra Energy is really two businesses in one. First, there is the company's regulated utility business, which is largely focused on Florida. That state continues to see in-migration, which means more customers. More customers means more need to expand NextEra's operations in the state and more need to ensure the reliability of the infrastructure.

Both of these things should make it easier for NextEra Energy to get rate hikes approved by regulators. The drawback is that regulated utility operations generally grow slowly. So this is basically the reliable foundation on which growth will be built, not the growth engine.

The excitement comes from the fact that, on top of the largest regulated utility business in the United States, NextEra has built the largest solar and wind power generator on planet Earth. It also happens to be the largest developer of wind and solar in the United States, as well. Clean energy has experienced material growth and, as it displaces dirtier fuel options, it should continue to provide ample room for growth for years to come -- or for the next three years, at the very least.

But to put some numbers on this, NextEra Energy is looking to expand its solar and wind business from a nameplate capacity of 24 gigawatts in 2021 to between 46 gigawatts and 53 gigawatts in 2025. That's, roughly speaking, doubling the size of the company's nameplate production capacity.

In addition to that, NextEra is looking to increase the size of its storage capacity from one gigawatt in 2021 to between six gigawatts and eight gigawatts, which is even more material growth, though from a much smaller base. It is also building out transmission capacity, with plans to double its cumulative investment in this space to around $6 billion.

Thus, the easy answer to where NextEra will be in three years is: Well, bigger.

Benefits along the way

That brings the story back to the company's dividend, which is backed by the planned capital spending on both the core utility operations and the renewable side of the business.

NextEra isn't a great option for investors in search of high yields, but if you are a dividend growth investor you might want to take a close look. It historically trades at a premium to its utility peers, but so far it has managed to reward investors well via dividend growth as it expands its already impressive business. There's no particular reason to think the next three years will be any different.