10 Best Counter Cyclical and Defensive Stocks to Invest In

4. NextEra Energy Inc. (NYSE:NEE)

Market Capitalization as of September 11: $169.16 Billion

Number of Hedge Fund Investors in Q2 2024: 73

NextEra Energy Inc. (NYSE:NEE) is a utility investment play and one of the best defensive stocks to invest in, as people will always use electric power regardless of the prevailing economic situation. The company distributes electric power to retail and wholesale customers across the U.S.

Given that the company mostly deals in clean energy generated from wind, solar, and natural gas, it underscores its competitive edge in the sector. The growing demand for clean energy to power data centers amid the artificial intelligence revolution underlines the company’s long-term prospects and growth metrics.

As demand for clean energy grows, NextEra Energy Inc. (NYSE:NEE) is well poised to fulfill this demand by strategically investing in enhancing and modernizing its infrastructure. Its subsidiary, Florida Power & Light Company (FPL), which encompasses Gulf Power, is set to allocate $43.8 billion over the 2024-2028 timeframe to these investments.

FPL’s priorities include the development of clean, efficient, and modern power generation, along with the improvement of a more advanced and intelligent electrical grid. Additionally, the favorable economic situation in Florida is further enhancing the company’s prospects.

There’s still a lot of potential for growth as the U.S. Department of Energy reports that solar and wind energy made up only 13% of the electricity produced within the country as of 2022, and this figure is expected to climb in the future. Moreover, the total demand for electricity in the United States is rising. NextEra stands to gain from its position in Florida. Government figures show that Florida’s large population and economy are among the most rapidly expanding in the country.

NextEra Energy Inc. (NYSE:NEE) distributes a yearly dividend of $2.06, which equals a yield of 2.50% based on its present share value. Its average dividend yield over the last four years stands at 2.26%. Additionally, the company’s dividend distributions have grown at a compound annual growth rate (CAGR) of 10.6% over the last five years.

As of the second quarter, NextEra Energy Inc. (NYSE:NEE) ‘s stock is held by 73 hedge funds with stakes worth $2.11 billion. GQG Partners is the largest shareholder in the company and has stocks worth $884.56 million as of June 30.