This 5.5% Dividend Stock Raises Its Payout Every Quarter

“We stay on monitor to ship on our greatest in school 12% to fifteen% annual distribution per unit progress expectations…”

Translation: We’re going to hike our dividend by 12% to fifteen% per yr.

Kirk, you’ve my full consideration. Please proceed.

“By means of not less than 2026…”

Kirk, we’re speaking three extra years of 12% to fifteen% dividend progress?! We’re in.

Our man is the chief monetary officer (CFO
CFO
) of NextEra Power

NEE
(NEE). NEE is the biggest developer of renewable vitality in North America. It’s one of many quickest dividend growers within the utility house.

NEE is a type of nice dividend shares that’s hardly ever low cost as a result of everybody is aware of it’s superior. Its yield is simply 2.5% right this moment however our man Kirk factors out why we shouldn’t sleep on this headline quantity. Ten % raises are probably for the following couple of years.

Double-digit yearly dividend raises from a protected utility. Does it get any higher than that?

Imagine it or not, sure! One of many few vitality dividends rising sooner than NEE’s is NEP’s. NextEra Power Companions (NEP) is the “yieldco” spun off from NEE again in 2014. Since then, the spinoff has executed nothing however dish critical dividends—at the next and better fee!

Annualized Dividends Paid Per Share

Yieldcos had been a giant factor within the mid 2010s. It felt like each utility was spinning off property right into a yieldco with the promise of, effectively, the next yield.

The father or mother firm raised fast capital from the IPO. And income-hungry traders had been handled to a giant, dependable dividend. Normally, greater and higher than the payout dished by the father or mother.

Renewable vitality is the angle. NEP operates clear vitality tasks on long-term contracts with steady money flows. Yup, wind farms, photo voltaic farms and even pure fuel property—although NEP will quickly be promoting its pure fuel pipelines to focus solely on renewables.

Which suggests NEP has ample credit score to buy groceries for extra renewable vitality property as alternatives come up.

CFO Kirk Crews hinted lately {that a} bunch of shopping for was not wanted to hit the NEP’s double-digit dividend progress targets. However with a possible recession across the nook, it’s at all times good to have a stack of money—or entry to it. That provides us confidence in Kirk.

Meantime, the magnet says NEP has a lot of upside. This 5.5% payer simply rewarded us with our most up-to-date dividend elevate:

NEP Raises Its Dividend Each Quarter

Did you miss it? No downside. NEP’s subsequent payout hike is now lower than three months away.

Which suggests the inventory’s 5.5% headline yield is definitely understated. Over the following 12 months, NEP pays much more. It at all times does, thanks to those quarterly raises.

Kirk says his This fall dividend might be between $0.91 and $0.935—which is already about 10% greater than Monday’s payout. Rock on, Kirk!

Brett Owens is chief funding strategist for Contrarian Outlook. For extra nice revenue concepts, get your free copy his newest particular report: Your Early Retirement Portfolio: Enormous Dividends—Each Month—Eternally.

Disclosure: none