Christopher WilliamsNextEra EnergyNEETOP PICKMar 26, 2004

The utility space has been in a downtrend but is coming back up to trend. Don't be long with the possibility of rates going up.

Challenging year due to higher interest rates. Florida Power & Light has been its reliable utility cash cow. Proceeds from that have been invested in solar and wind, and they're the largest provider in the US. He's been adding. Long term, moving in the right direction. Yield is 3.3%.

The parent company has a more stable base. The NextEra Partners component is in the renewable power space, It has fewer projects it can take on and therefore has less growth ahead.

NEE has had a tough year, with rising rates, and is now down 19% YTD. But it remains one of our preferred US large-cap utility stocks. It has shown very steady earnings growth, and cash flow is secure and solid. The yield is 2.8% and it has a decent record of raising its dividend. The last quarter was fine, and the company expects a three-year growth rate (compounded) of between 5% and 7%, which is higher than peers. We think it looks good overall. 
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NEE is the biggest American utility, much bigger than AQN. NEE has a huge business in electricity (Florida) which is much more stable than AQN's green energy. NEE does have a renewables business though in the US and Canada, and this holds promise. The grid will continue to get greener over time. A consistent earner and has been meeting or beating quarters much more consistently than AQN. 

Has been choppy. Utilities are sensitive to interest rates and pressured valuation. But they benefit from population growth in Florida where they operate electricity. Their other business is renewable energy Solar and wind), so they benefit from Washington's green energy incentives. A third tailwind is ongoing ESG investing. Fundamentals remain sound.

Don't be scared in coming weeks over talk of regulation about Florida Power & Light, always a tailwind. The play here is solar, which will continue to grow, so hold on.