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Analyzing NextEra Energy’s Yield before Its Ex-Dividend Date

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NextEra Energy’s ex-dividend date

NextEra Energy (NEE) declared a dividend of $0.98 per share on July 28, 2017. It has an ex-dividend date of August 23, which will be paid on September 15, 2017.

NextEra Energy usually raises its dividend in the first quarter of the year. Considering annualized dividends, the utility increased its per share dividend 13% this year—compared to 2016. The utility giant has increased its per share dividends for 11 consecutive years.

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Dividend yields

The above chart shows the current dividend yields of top utilities from the S&P 500 Utilities Index (XLU). At 2.7%, NextEra Energy is one of the lowest-yielding utility stocks among its peers. In comparison, XLU yields 3.5%.

NextEra Energy’s peers Southern Company (SO) and Duke Energy (DUK) yield ~4.7% and 4.2%, respectively.

It should be noted that despite the relatively lower yield, NextEra Energy’s dividend profile looks alluring due to its decent dividend growth in the last several years. In the last five years, NextEra Energy managed to grow its per share dividends ~9.6% compounded annually. It was higher than utilities’ average dividend growth. During the same period, utilities managed to increase their per share dividends 4.2% compounded annually.

Southern Company raised its dividends 3.6%, while Duke Energy increased its dividends 2.5% compounded annually in the last five years.

How did NextEra Energy manage to grow dividends by more than double the average? Will its success continue? We’ll discuss this in the next part.

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