Utilities Go Green: Will Strengthening Renewable Focus Benefit NEE?

NextEra Energy NEE is well-positioned in the renewable energy business, owing to early and aggressive investments in wind, solar and battery storage technologies. As the companies in the Zacks Utility - Electric Power industry shift toward clean power, more utilities are generating electricity from renewable sources. NextEra’s established renewable infrastructure places it ahead of competitors. This allows the company to tap into the rising demand for low-carbon energy.

Increasing environmental awareness and stricter emissions regulations are accelerating clean energy adoption. NextEra is well-equipped to meet this demand, supporting stable revenue streams and long-term growth. The company will add more renewable projects to its portfolio and has nearly 28 GW of renewable projects in backlog.

Economically, renewables offer a significant advantage since sunlight and wind are free resources. Over the past decade, technological improvements have substantially lowered the cost of renewable energy generation. This allows NextEra to avoid the volatility of fossil fuel markets while locking in long-term power purchase agreements, which provide consistent and predictable cash flows. In addition, investments in advanced battery storage systems help improve grid reliability and create new revenue opportunities.

Strategically, NextEra’s leadership in clean energy strengthens its reputation and growth prospects. Government support through tax incentives and carbon mandates will continue to favor renewables. With ongoing investment, NextEra is reinforcing its position as a global leader in the clean energy transition.

How Other Utilities are Developing Renewable Assets

Dominion Energy D plans to invest $50 billion in 2025-2029, with a long-term objective to add clean energy projects by 2036. The company aims 15% annual increase in the renewable energy capacity. Dominion also operates four nuclear power stations, which generate nearly 40% of its total production.

Xcel Energy’s XEL ability to produce a high volume of clean energy will allow it to meet rising demand from data centers. The company gains from low-priced wind and solar resources, and expects a total customer request for data centers of 8.9 gigawatt by 2029. Xcel Energy’s high-quality services draw new customers.

NEE Stock’s Price Performance

Shares of NextEra gained 3.2% in the last month compared with the Zacks Utility - Electric Power industry’s  0.9% rise.

Image Source: Zacks Investment Research

 

NextEra Energy’s Earnings Estimates Move North

The company expects its 2025 earnings per share to be $3.45-$3.70 compared with $3.43 a year ago. The Zacks Consensus Estimate for NEE’s 2025 and 2026 earnings per share indicates year-over-year growth of 7.29% and 7.95%, respectively.

Image Source: Zacks Investment Research

NEE Stock Returns Higher Than Its Industry

Return on Equity (“ROE”) shows how effectively a company’s management is utilizing investors’ money to generate returns. The ROE of the company is better than its industry. The current ROE of the company is 12.06% compared with its industry’s 10.13%.

Image Source: Zacks Investment Research

 

NEE’s Zacks Rank

NextEra currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Only $1 to See All Zacks' Buys and Sells

We're not kidding.

Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.

Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.

See Stocks Now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

 
Xcel Energy Inc. (XEL): Free Stock Analysis Report
 
NextEra Energy, Inc. (NEE): Free Stock Analysis Report
 
Dominion Energy Inc. (D): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

This article contains syndicated content. We have not reviewed, approved, or endorsed the content, and may receive compensation for placement of the content on this site. For more information please view the Barchart Disclosure Policy here.