New Trade for July 31st, 2023

Stocks ticked higher this morning as the market looked to wrap up a solid month of gains in July. The tech-heavy Nasdaq Composite has gained 3.8% month to date, on pace for its fifth positive month in a row. The S&P is up 3%, also on track for its fifth straight winning month. Meanwhile, the blue-chip Dow is up 3.1% in July.

Today’s trade alert highlights an unexpected, one-of-a-kind growth stock that the experts see posting a double-digit earnings increase in the coming months.

NextEra Energy Inc. (NEE) 

Most stocks from the utility sector are slow-growing income plays. As such, an electric utility stock wouldn’t typically be considered a growth stock.   However, Wall Street expects NextEra Energy to grow its earnings by an annual average of around 9% over the next five years. This comes on the heels of averaging more than 8% adjusted earnings growth since 2007. NextEra Energy is a growth stock within the utility sector for all intents and purposes.

The biggest differentiator that has helped NextEra achieve this stellar growth rate is its focus on renewable energy. NextEra is currently generating 31 gigawatts (GW) of capacity from renewable energy sources, including 23 GW from wind and 5 GW from solar – which has helped substantially lower electricity generation costs for the company and its customers. NextEra Energy pays an annual dividend of 2.47% and is currently trading at its lowest 12-month forward price-to-earnings ratio in five years, making it a superior growth opportunity. Overall, NEE gets a Strong Buy rating from the consensus based on 19 recent reviews, including 15 Buys and 4 Holds. An average price target of $89 represents a 22% upside. 

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