NextEra Energy (NEE) - >>> 5 Stocks to Buy With $100 During a Market Sell-Off
Fortunes are made by putting your money to work during periods of panic.
Motley Fool
by Sean Williams
Oct 30, 2020
NextEra Energy
If your brokerage offers fractional-share investing, this is sort of moot point, but following a 4-for-1 stock split this week, electric-utility stock NextEra Energy (NYSE:NEE) is ripe for the picking.
Though electric utilities are typically a slow-growing operating model, NextEra is an exception to the rule. That's because this company has aggressively invested in green-energy projects and become the leading generator of capacity from solar and wind power in the United States. Not only will this put NextEra ahead of Capitol Hill's legislative curve if a renewable-energy initiative is ever introduced for utilities, but it also brings the company's generation costs way down. Despite a hefty upfront cost, these green energy projects are responsible for NextEra Energy's high-single-digit growth rate.
The company's traditional utility operations (those not powered by renewables) also benefit from being regulated. This is just a fancy way of saying that NextEra can't hike its prices without a state public-utility commission giving it the OK to do so. That might sound detrimental, but it makes cash flow exceptionally transparent and predictable, while also helping the company avoid potentially volatile wholesale electricity pricing.
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