Dividend payers such as NextEra Energy (NEE 0.10%) can be powerful wealth builders. They’re attractive for a bunch of reasons. For starters, companies typically wait until they’re generating fairly reliable income before committing to a dividend payout. And once they start paying one, they’re generally loath to reduce it or suspend it.
With dividend-paying shares of healthy and growing companies, you can look forward to share price appreciation, dividend payouts, and dividend increases over time. It’s a win-win-win!
Image source: Getty Images.
Check out the impressive stats below:
|
Dividend-Paying Status |
Average Annual Total Return, 1973-2023 |
|---|---|
|
Dividend growers and initiators |
10.19% |
|
Dividend payers |
9.17% |
|
No change in dividend policy |
6.74% |
|
Dividend non-payers |
4.27% |
|
Dividend shrinkers and eliminators |
(0.63%) |
|
Equal-weighted S&P 500 index |
7.72% |
Data source: Ned Davis Research and Hartford Funds.
If you’re considering NextEra Energy, you might be wondering how many shares of it you’ll need to own to generate annual income of, say, $1,000. Here’s how to figure that out: Look up the stock online and you’ll likely see that it’s paying $0.52 per quarter, or $2.06 per year, per share. Its dividend yield was recently a solid 3%. (It’s also expecting to increase its payouts by around 10% annually for the coming few years.)
Take your desired total dividend income of $1,000 and divide it by $2.06. You’ll arrive at 486, which is the number of shares of NextEra Energy you’ll need in order to receive $1,000 in dividends — a sum that will likely increase over time. At recent share prices, that amount will cost you a little more than $34,000.
NextEra Energy has been a solid performer for its shareholders for many years, with average annual gains of around 12% over the past decade. The renewable energy stock, with a recent market value near $150 billion, is the largest producer of wind and solar energy in the world — and is a major presence in battery storage, too.
If you’re looking for growing dividend income and you’re bullish on renewable energy, give NextEra Energy a closer look.