2024-07-29 05:46:00 ET
NextEra Energy Partners (NYSE: NEP) pays a monster dividend. It currently yields nearly 14%, which is more than 10 times higher than the S&P 500 's 1.3% dividend yield.
The renewable energy producer plans to continue increasing its prodigious payout at around a 6% annual rate in the near term . However, it's also evaluating alternatives to lower its cost of capital , which is a big reason its yield is so high. Opting for a different pathway could also lead the company to cut its payout.
NextEra Energy Partners' CEO, John Ketchum, discussed the company's plans on the second-quarter conference call . He noted that the company had made progress on its current strategy of organically growing its earnings while simultaneously taking steps to shore up its financial foundation. Ketchum stated: "Since our last earnings call, the partnership completed the next NEP Renewables II equity buyout of roughly $190 million in June 2024 and paid down our 2024 convertible maturity with cash on hand. After repayment of a $700 million holdco debt maturity earlier this month, the partnership now has approximately $2.7 billion of liquidity."
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This Nearly 14%-Yielding Dividend's Future Remains Uncertain