Don't Wait for a Market Crash to Buy This Growth Stock
$New Fortress Energy(NFE.US$ Key Points
NextEra Energy is really two companies in one.
The core, or foundation, is a slow-growing, and well-positioned, regulated electric utility.
The other is one of the largest renewable power businesses on Earth, and it's still growing at a rapid clip.
NextEra Energy (NYSE:NEE) is not a cheap stock, and it really never is, which is why investors with a growth bias shouldn't wait for a market crash to jump aboard. In fact, it's not just growth investors who will love NextEra, but dividend growth types too. Here's what you need to know.
NextEra Energy is really two companies in one.
The core, or foundation, is a slow-growing, and well-positioned, regulated electric utility.
The other is one of the largest renewable power businesses on Earth, and it's still growing at a rapid clip.
NextEra Energy (NYSE:NEE) is not a cheap stock, and it really never is, which is why investors with a growth bias shouldn't wait for a market crash to jump aboard. In fact, it's not just growth investors who will love NextEra, but dividend growth types too. Here's what you need to know.
The core
The foundation of NextEra's business is a boring old electric utility. Known as Florida Power & Light, this business, plus some smaller operations in the Sunshine State, serves 11 million customers. It is the largest regulated electric utility in the United States. That means that it has been granted a monopoly in the markets it serves, but, in exchange, it must get its rates approved by the government.
The foundation of NextEra's business is a boring old electric utility. Known as Florida Power & Light, this business, plus some smaller operations in the Sunshine State, serves 11 million customers. It is the largest regulated electric utility in the United States. That means that it has been granted a monopoly in the markets it serves, but, in exchange, it must get its rates approved by the government.
This is actually a pretty good deal for the utility, because it generally means slow and consistent growth over time regardless of what's going on in the stock market. That's driven by capital spending to ensure adequate and reliable power for customers, which regulators view quite favorably. And Florida's population has been growing for years, so NextEra also gets the benefit of operating in a really desirable region.
But nothing here, in and of itself, should excite a growth investor. Utilities are generally slow and steady behemoths that toss off reliable cash flows. Where things start to get exciting is that NextEra is using this core business to help fund the build-out of a giant renewable power operation.
Article excepted from The Motley Fool.
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