Analyzing NEE’s Discounted Yield before the Ex-Dividend Date



NextEra Energy’s ex-dividend date

NextEra Energy (NEE) declared a dividend per share of $0.98 per share for 4Q17. The ex-dividend date for these dividends is November 22. The dividends will be paid on December 15, 2017.

NextEra Energy is expected to pay dividends per share of $3.93 in 2017—13% higher than its dividends per share in 2016.

NEE yld

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Dividend growth

NextEra Energy’s dividend growth has been one of the highest in the industry. In the past five years, NextEra Energy increased its dividends per share 10.4% compounded annually. The Utilities Select Sector SPDR ETF (XLU) increased its dividends per share 4.2% compounded annually during the same period.

NextEra Energy’s dividend growth is more than double the average dividend growth due to its higher earnings growth. The utility managed to grow its earnings per share more than 8% compounded annually in the past five years. Broader utilities’ earnings rose 4%–6% annually during the same period.

Dividend yield

Currently, NextEra Energy is offering a dividend yield of 2.5%, which is significantly lower than broader utilities’ average of 3.5%. It should be noted that NextEra Energy’s yield traded at a large discount compared to its peers (IDU) in the past five years.

NextEra Energy’s peers Southern Company (SO) and Duke Energy (DUK) offer a dividend yield of 4.5% and 4.1%, respectively.


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