10 Best Beaten Down Dividend Stocks to Invest in Now

3. NextEra Energy Partners, LP (NYSE:NEP)

3-year high-to-low share price decrease as of August 30: 71.1%

NextEra Energy Partners, LP (NYSE:NEP) is an American master limited partnership (MLP), based in Florida. The company mainly focuses on the acquisition of clean energy projects. The company is encountering challenges with its convertible equity portfolio financings (CEPF) used to fund acquisitions and meet its dividend goals. Analysts anticipate a possible dividend reduction. They believe that the company needs to secure a private capital solution to rebuild confidence in its ability to grow and sustain its distribution over the long term. The stock is down by over 19% since the start of 2024 and in the past 12 months, it has fallen significantly by over 48%.

Another factor contributing to expectations of a dividend cut is that NextEra Energy Partners, LP (NYSE:NEP) has lowered its dividend growth rate to 5% to 8% annually with a goal of 6% per year, from the previous rate of 12% to 15%. However, NEP can still be considered a strong dividend payer, as even its revised dividend growth rate remains impressive for a high-yield stock.

On July 24, NextEra Energy Partners, LP (NYSE:NEP) declared a 1.4% hike in its quarterly dividend to $0.905 per share. The company has been growing its dividends consistently every quarter since 2015, which makes NEP one of the best dividend stocks. Its strong cash generation is a key factor behind its consistent dividend growth. In the second quarter of 2024, the company’s cash available for distribution (CAFD) grew to $220 million, from $200 million in the same period last year. In the first six months of the year, its operating cash flow rose to $309 million, from $296 million in the prior-year period. The stock’s dividend yield on August 30 came in at 14.49%.

Insider Monkey’s database of Q2 2024 indicated that 20 hedge funds held stakes in NextEra Energy Partners, LP (NYSE:NEP), up from 18 in the previous quarter. These stakes have a consolidated value of over $71 million.