NextEra Energy (NEE 5.20%) recently closed the book on 2024 by reporting its fourth-quarter and full-year financial results. The utility had an excellent year. It delivered strong earnings growth and set another record for originating renewable energy development projects.
Those projects and other growth drivers set the stage for the company to continue to deliver supercharged earnings growth compared to its peers in the utility sector. Here's a look back at last year and what's ahead for the leading renewable energy producer.
Another strong year
"NextEra Energy had an excellent year of execution in 2024, growing full-year adjusted earnings per share by more than 8% over 2023 and once again achieving the top end of our adjusted earnings per share expectations range," stated CEO John Ketchum in the company's fourth-quarter earnings press release. It generated $6 billion, or $3.43 per share, of adjusted earnings, an 8.2% increase from 2023's level. That was above the high end of its 6% to 8% annual target range.
Last year's high-end growth rate was the continuation of "our track record of providing long term value for shareholders," noted the CEO. He further stated, "We have delivered compound annual growth in adjusted earnings per share of more than 10% since 2021 and of approximately 10% over the past 10 years, both of which are the highest among all top-10 power companies." The company isn't just beating its peers; it's crushing their growth rates. It has grown its earnings at more than double the peer-group average over the last three- and five-year periods and triple the peer-group average during the past decade.
Its heavy investment in renewable energy is a big differentiating factor powering its supercharged growth rate. It has built the country's leading portfolio of renewable energy assets. Ketchum noted, "NextEra Energy generates more electricity and invests more in energy infrastructure than any other company in the U.S. and in 2024 placed into service roughly 8.7 gigawatts (GW) of new renewables and storage projects, expanding our leadership in power generation." These assets generate lots of low-cost power, enabling NextEra Energy to produce enhanced returns and earnings growth.
The power to continue delivering supercharged growth
NextEra Energy also had a strong year securing future growth projects. The company's energy resource segment delivered its best year for originating new renewable energy projects for the third year in a row. Last year, it added more than 12 GW of new renewable energy and battery storage projects to its backlog, powered largely by strong demand from commercial and industrial customers that are looking for low-cost energy to meet their growing demand. The company ended the year with more than 25 GW of projects in its backlog after placing 6 GW into service over the past four quarters.
That robust backlog of projects helps support NextEra Energy's long-term growth outlook. The utility expects to grow its adjusted earnings per share by 6% to 8% annually from last year's level through 2027. "Given the strength of both of our businesses, we will be disappointed if we are not able to deliver financial results at or near the top of our adjusted earnings per share expectations ranges in each year through 2027, while maintaining our strong balance sheet and credit ratings," stated CEO John Ketchum in the earnings press release. That high-end growth and the company's lower dividend payout ratio drive its expectations of increasing its dividend by about 10% annually through at least 2026.
NextEra Energy is already taking steps to secure its growth beyond that timeframe. The company is making progress in its evaluation of recommissioning the Duane Arnold Energy Center in Iowa. This process could see the company potentially restart the nuclear power plant as early as the end of 2028. It could help support the expected surge in power demand in the coming years from data centers to support AI and cloud computing.
The company has also signed framework agreements with several large companies to potentially deploy another 15 GW of renewable energy capacity through 2030 to support their operations. While these projects aren't in the backlog yet, they provide even more visibility into its longer-term growth potential.
A bright future
NextEra Energy continues to deliver sector-leading earnings growth. That should continue in the future, given the company's robust backlog and increasing visibility into its longer-term growth opportunities. The company's growth catalysts should give it the power to continue growing its dividend at a healthy rate, which could help it produce strong total returns in the coming years.
