The energy industry is undergoing a multi-decade-long transition to lower-carbon energy. As a result, companies focused on investing in clean energy should thrive in the decades ahead.
Brookfield Renewable (BEPC +1.95%)(BEP +1.41%) and NextEra Energy (NEE +0.41%) are leaders in investing in clean energy. That makes them excellent energy stocks to buy with $1,000 right now and hold for the rest of your life.
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High-powered growth ahead
Brookfield Renewable operates one of the world's largest renewable energy and sustainable solutions platforms. The company's portfolio generates predictable, steadily rising cash flow, underpinned by long-term contracts that link rates to inflation. That enables it to pay an attractive and growing dividend. Brookfield has increased its payout, which currently yields nearly 4%, by at least 5% each year since 2011.
The company has multiple additional growth drivers beyond inflation-linked rate increases. Brookfield also expects to benefit from margin enhancement activities, its vast development pipeline, and acquisitions. This quartet of drivers should power more than 10% annual FFO per share growth through at least 2030, with continued robust growth likely well beyond that year. Brookfield's strong earnings growth supports its plan to continue increasing its dividend by 5% to 9% annually. The clean power company's high-yield and growth combo positions it to produce high-powered total returns in the years to come.
NYSE: BEPC
Key Data Points
Powerful total return potential
NextEra Energy operates the country's largest electric utility (FPL) and a leading clean energy infrastructure development company (NextEra Energy Resources). FPL generates stable, rate-regulated revenue, while the energy resources segment produces steady cash flow backed by long-term contracts. That provides NextEra with the stable cash flow to support its steadily rising dividend. The utility's payout currently yields nearly 3% and has grown at a 10% compound annual rate over the last 20 years.
NYSE: NEE
Key Data Points
The company plans to invest an enormous amount of capital in the coming years to support surging power demand. It plans to build new renewable and natural gas generation capacity, electricity and gas transmission lines, and invest directly in developing AI data centers. These investments support NextEra Energy's view that it can grow its adjusted earnings per share at a rate of more than 8% annually through at least 2035. That drives its plans to increase its dividend by 10% this year and by a 6% compound annual rate from that level in 2027 and 2028. This combination of income and growth could fuel robust total returns for investors in the coming years.
Plugged into a powerful growth trend
Brookfield Renewable and NextEra Energy are leaders in operating and developing clean energy. That puts them in a strong position to capitalize on the lower-carbon energy transition and expected acceleration in power demand. These energy stocks have the power to turn a $1,000 investment made today into a much larger sum of money in the decades ahead.
