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NextEra Energy Partners: Get Rich While Fighting Climate Change With This Clean Energy Dividend Growth Machine

Published Thu, 10 Oct 2019 07:40:58 -0400 on Seeking Alpha

Investment Thesis
NextEra Energy Partners (NEP) is a publicly traded limited partnership (pass-through company) in the clean energy infrastructure space. The LP has more than doubled its dividend since its first payment in November 2014, having boosted the payout every quarter since then. Looking forward, NEP is committed to raising its dividend by 12-15% each year through 2024.
Given the current dividend yield of 3.8% and assuming the average dividend growth comes in at the midpoint of management's guidance (13.5% annually), investors who buy at today's price would enjoy a 7.16% yield-on-cost in just five years!
But, of course, NEP is not without risks.
Another Seeking Alpha contributor, Robbert Manders, penned an insightful research piece on NEP in April of this year illuminating the complex financial structure of the LP, as well as the company's veritable dependence on continued share/unit price appreciation in order to fund acquisitions. These issues certainly present valid concerns. NEP is not without risk. Something could go wrong - projects underperforming, capital markets melting down - that could reduce the stock price and thus derail the company's growth plans.
In what follows, I will explain why I view the risk-adjusted return potential of this fast-growing clean energy income stock as too attractive to pass up.

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The Company
NEP is the sponsored YieldCo of parent and fast-growing Florida utility giant, NextEra Energy... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
NEXTERA ENERGY 220.74   31.7 6.96 5.00 2.29


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