Utility Sector Ideas

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>>> NextEra Energy


https://www.fool.com/investing/2021/08/23/5-no-brainer-stocks-to-invest-1000-in-right-now/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


Another no-brainer stock to invest $1,000 in right now is the nation's largest electric utility stock, NextEra Energy (NYSE:NEE).

Typically, electric utility companies grow by a low single-digit rate, but are buoyed by predictable cash flow, which allows them to pay out market-topping yields in the 2% to 4% range. NextEra isn't like your typical utility stock. That's because it's been investing tens of billions of dollars into renewable energy projects that are designed to lower its electric generation costs and significantly lift its growth rate. NextEra generates more capacity from solar and wind power than any other utility in the country, and it's translated into the company averaging a high single-digit growth rate for more than a decade. Between 2020 and 2022, NextEra is doling out $50 billion to $55 billion for new infrastructure projects.

Although green energy is the future, NextEra does still enjoy a healthy amount of cash flow from its regulated operations (i.e., those not powered by renewable energy). Some folks might see the need to request rate hikes from state public utility commissions as a nuisance. The reality is that regulated utilities avoid potentially volatile wholesale market pricing and have exceptionally transparent cash flow.

As long as lending rates remain favorably low, look for NextEra to be on the leading edge of renewable energy innovation.

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