NextEra Energy Ramps Up Quarterly Dividend By 10%; Street Says Buy

NextEra Energy raised its quarterly common stock dividend by 10% to $0.385 per share. The move is in line with the target of the world’s largest producer of wind and solar energy, of around 10% dividend growth per year through 2022.

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NextEra Energy (NEE) announced that the new dividend will be paid on March 15, to shareholders of record as of Feb. 26. Shares closed at $83.13 on Feb. 12, down nearly 1%.

The company’s annual dividend of $1.54 per share now reflects a dividend yield of 1.85%.

NextEra Energy CEO Jim Robo commented, “The board’s approval to continue to grow our dividends per share in excess of our long-term expected adjusted earnings per share growth rate is a result of our success in executing on our industry-leading business strategy.”

“With a 61% payout ratio at the end of 2020, well below the peer average of approximately 64%, and the continued strength of the earnings and operating cash flow growth at NextEra Energy, we remain well-positioned to continue to support the dividend policy going forward,” he added. (See NextEra Energy stock analysis on TipRanks)

On Jan. 27, Credit Suisse analyst Michael Weinstein W. increased the stock’s price target from $77 to $87 (4.7% upside potential) citing a higher EV/EBITDA multiple reflecting growth at a faster pace and a higher premium 2022 P/E multiple for the utilities.

The analyst expects the sector to record above-average earnings growth along with having regulatory stability, and investment opportunities in the long-term. Weinstein maintained a Buy rating on the stock.

The consensus rating among analysts is a Strong Buy based on 8 Buys and 2 Holds. The average analyst price target of $89.70 suggests upside potential of around 7.9% over the next 12 months. Shares have jumped almost 21% over the past six months.

Based on 8 unique factors, NextEra Energy scores a “Perfect 10” Smart Score, which implies that the stock is expected to outperform the market moving forward.