Investors in NextEra Energy (NEE 0.14%) got some respite this week as the utility stock surged after falling consistently since the end of September. NextEra Energy stock was trading 9% higher through noon Friday, according to data provided by S&P Global Market Intelligence, as investors saw an opportunity to buy the beaten-down stock after its latest quarterly numbers came out. The stock is down roughly 26% over the past year.
NextEra Energy reiterates earnings and dividend growth goals
NextEra Energy grew its adjusted earnings per share (EPS) by 10.6%year over year in the third quarter, driven by strong numbers from both its regulated utility business, Florida Power & Light, as well as its energy resource (renewable energy) arm. What caught the market's attention, was that contrary to fears that NextEra Energy might downgrade its full-year outlook or slash its dividend growth goal, the company stuck by its guidance.
NYSE: NEE
Key Data Points
NextEra Energy expects adjusted EPS to range between $2.98 per share and $3.13 per share for 2023, and between $3.23 a share and $3.43 per share in 2024. That represents roughly 5% growth at the midpoint for this year. Management also gave out projections for the longer term, expecting adjusted EPS to grow by 6% to 8% in 2025 and 2026 off a 2024 base.
NextEra Energy also expects to grow its annual dividend per share by around 10% through at least 2024, off a 2022 base. After its subsidiary NextEra Energy Partners (NEP 0.29%) slashed its annual dividend growth outlook through 2026 last month, primarily because of high interest rates, the market feared NextEra Energy would slow down its dividend growth, too. But for now, the company has reiterated its goal, and that was a big reason why the stock rebounded this week.
Is NextEra Energy stock a buy now?
The biggest fear of investors in NextEra Energy right now is how higher interest rates may impact the company's growth plans. Management tried to alleviate those fears during the company's Q3 earnings conference call this week by highlighting how a 50-basis-point rise in the U.S. yield curve would have no impact on the company's projected 2023 and 2024 adjusted EPS.
At this point, I believe NextEra Energy remains on strong footing. With the company still committed to growing its dividends and its yield of 3.2% hovering at more than 10-year highs, this could be a great time to buy and hold the stock for some good dividend and growth income.
