Top Three Pioneering Dividend Stocks to Watch in the Second Half of 2022
NextEra Energy Leads the Way in Renewable Energy Transition
In the rapidly evolving landscape of energy production, three major players – NextEra Energy, Equinor, and Deere – are making significant strides towards a more sustainable future.
NextEra Energy, the largest renewable energy operator in North America, is aggressively investing in expanding its clean energy portfolio. The company has committed over $74 billion through 2029 to develop utility-scale projects encompassing solar, wind, battery storage, nuclear, and natural gas assets. This ambitious plan aims to support the surge in electricity demand driven by AI and data centers.
Two key subsidiaries, Florida Power & Light (FPL) and NextEra Energy Resources (NEER), play instrumental roles in this transition. FPL is modernizing a gas-nuclear-solar hybrid grid serving a growing customer base, while NEER emphasizes wind, solar, and battery storage for grid reliability. In 2024, FPL sourced 69% of its electricity from natural gas and 20% from solar, with NEER’s generation being 64% wind and 17% solar.
This diverse, clean-energy mix supports resilient, low-emission power and positions NextEra well to benefit from decarbonization trends. Financially, NextEra projects continued earnings growth with adjusted EPS growth guidance of 6–8% annually from 2025 to 2027.
NextEra Energy's main business segments are Florida Power & Light (FPL) and NextEra Energy Resources (NEER). The company's stock outperformance is due to its early mover advantage in transitioning away from coal and natural gas towards renewables. Its investments in renewable energy are suitable for risk-averse investors due to their predictable cash flows that support the company's growing dividend and future development projects.
While information on Equinor and Deere's long-term renewable and sustainability strategies and performance is not readily available, here's a brief overview. Equinor, Norway's biggest oil and gas company, has aggressive carbon reduction goals and is investing heavily in renewable energy, carbon capture and storage, and offshore wind power. The company aims to boost oil and gas production by just 2% between 2021 and 2022 while lowering the carbon intensity of its oil and gas portfolio.
Deere, on the other hand, focuses on sustainable and precision agriculture technology, including electrification of equipment and optimizing resource use to reduce environmental impact. The company plans to lower its carbon-dioxide-equivalent emissions, improve nitrogen-use efficiency, and achieve 95% recycled product content by 2030, and reduce other emissions by 50% by that year. Deere's long-term growth strategy through sustainable business practices has shown success, as evidenced by its record profit in 2021 and forecast for 2022.
In conclusion, NextEra Energy leads with a well-capitalized, scale-driven renewable strategy integrated across regulated and competitive segments, supported by clear financial targets. Equinor and Deere are also making significant strides towards renewable energy and sustainability, though more specific and up-to-date information is needed to fully understand their long-term growth strategies and performance.
- NextEra Energy's diversified clean energy portfolio, consisting of investments in finance for solar, wind, battery storage, nuclear, and natural gas assets, aligns well with the growing demand driven by technology advancements like AI and data centers.
- To cater to risk-averse investors, NextEra Energy's focus on renewable energy investments provides predictable cash flows supporting the company's growing dividend and future development projects.
- The financial implications of NextEra Energy's commitment to renewable energy are evident in its projected earnings growth, with an adjusted EPS growth guidance of 6–8% annually from 2025 to 2027.
