Is This Dividend Stock One of the Best Recession-Proof Buys Now?

Investors are worried about a possible recession, with President Donald Trump’s tariffs-driven trade war raising concerns about overall U.S. economic health. His administration has implemented significant tariffs on imports from China, Canada, and Mexico, ranging from 10% to 25%. 

These measures have prompted retaliatory actions from affected countries. Canada has responded with tariffs on roughly $20 billion worth of U.S. goods, while China has imposed up-to-15% tariffs on various U.S. agricultural products. 

These reciprocal actions pose a risk to global supply chains, potentially leading to higher consumer prices and reduced economic growth. 

In response, investors are turning to companies known for their resilience during economic downturns. NextEra Energy (NEE) is one such option, having consistently performed well in challenging times due to its stable business model and focus on clean energy. 

With a forward dividend yield of approximately 3.1%, NEE operates as the world’s largest clean energy producer by market capitalization, serving millions of customers through subsidiaries like Florida Power & Light. But is this dividend stock truly recession-proof? Let’s explore further.

Decoding NextEra’s Financials

NextEra Energy (NEE) continues to show its financial strength, which is a big reason it does well during tough economic times. Recently, the company shared its fourth-quarter and full-year 2024 financial results, highlighting steady growth. 

For Q4 2024, NEE reported a GAAP net income of $1.203 billion, or $0.58 per share, down slightly from $1.210 billion ($0.59 per share) in Q4 2023. On an adjusted basis, earnings rose to $1.095 billion ($0.53 per share) from $1.067 billion ($0.52 per share) in the prior year’s quarter. 

For the full year, adjusted earnings grew by 8.2%, reaching $7.063 billion ($3.43 per share), compared to $6.441 billion ($3.17 per share) in 2023.

These results are partly due to successful initiatives like Florida Power & Light’s (FPL) 10% year-over-year growth in regulatory capital and NextEra Energy Resources’ addition of over 12 gigawatts of renewable energy projects to its backlog. 

These efforts not only make NEE stronger, but also ensure customers get reliable service and save money — an important factor for staying stable during recessions.

NEE’s valuation metrics also highlight its strong position. With a price-earnings (P/E) ratio of 19.87x and a PEG ratio of 2.8x, the stock offers growth potential while being reasonably priced compared to earnings. 

Its market capitalization is an impressive $150 billion, showcasing the scale of it operations. Shares are up 2.4% in the year to date and 23% over the past 52 weeks.

Adding to its appeal is NEE’s forward dividend yield of 3.1%. This steady income stream complements the company’s growth path, making it a compelling choice for those seeking stability and returns in uncertain times.

NEE’s Strategic Drivers

NextEra Energy is making significant strides in the renewable energy sector, aiming to double its current generation capacity to 81 gigawatts (GW) of renewable energy and storage by 2027. 

In addition to its renewable energy push, NEE is diversifying its energy mix to meet rising power demand. The company has filed a request to restart its nuclear plant in Iowa, which was shut down in 2020 due to storm damage. If approved, the plant could be operational by 2028, adding reliable nuclear power to the grid. This move shows NEE’s commitment to balancing clean and traditional energy sources.

NEE has also partnered with GE Vernova (GEV) to develop new natural gas (NGJ25) generation projects that can be paired with renewable energy and storage solutions. These projects will serve high-demand customers like data centers and manufacturing facilities, leveraging NextEra’s expertise in natural gas-fired generation.

With plans to invest $120 billion over the next four years, NEE is positioning itself as a key player in America’s clean energy transition. These strategic moves not only drive growth but also enhance NEE's ability to navigate economic uncertainties while delivering value to shareholders.

Future Forecasts for NEE Stock

NextEra Energy is looking forward to a bright future, reaffirming its long-term financial plans. For 2025, the company expects adjusted earnings per share (EPS) to range from $3.45 to $3.70. In 2026 and 2027, EPS is projected to grow further, reaching $3.63 to $4.00 and $3.85 to $4.32, respectively. 

Additionally, NEE plans to increase its dividends per share by about 10% annually through at least 2026, giving shareholders a steady income boost.

Analysts are just as optimistic about NEE’s future. The stock has received a consensus “Moderate Buy” rating from 20 analysts, with an average price target of $85.05. This suggests potential upside of 16.9% from its current price. 

The Bottom Line

Is NextEra Energy one of the best recession-proof buys now? Yes. With its robust financial performance, strategic renewable energy investments, and consistent dividend growth, NEE offers stability and growth potential. Its ability to outperform during economic downturns, combined with a strong analyst consensus, makes it an attractive choice for those seeking reliable returns amidst uncertainty.