We recently published a list of the 10 Best Long Term Stocks to Buy According to Billionaires. In this article, we are going to take a look at where NextEra Energy, Inc. (NYSE:NEE) stands against other best long term stocks.
Dividend-paying stocks have traditionally been seen as a solid foundation for investment portfolios, offering steady income and helping cushion the impact of market swings. However, despite these advantages, they occasionally trail the broader market—often overshadowed by more high-profile opportunities. Over the past couple of years, for example, dividend stocks underperformed as investors flocked to tech stocks. But following the recent market correction and the renewed pressure on tech shares due to tariffs introduced by Trump, dividend stocks have started to regain investor interest.
The Dividend Aristocrats Index, which tracks the performance of companies with 25 consecutive years of dividend growth, has fallen by nearly 2% since the start of 2025, compared with a nearly 8% decline in the broader market. This trend suggests that dividends are regaining momentum, with a growing number of companies initiating dividend policies while existing payers are steadily boosting their payouts to attract investors. According to a report by S&P Global, 408 constituents of the broader market are projected to pay dividends in 2025. Of these, nearly 350 are expected to raise their dividends over the next four quarters, contributing to an estimated 6% year-over-year growth in total dividends. In the broader US market, aggregate dividend growth is forecasted at 4.6% for 2025. Given that S&P companies account for approximately 85% of all dividends paid in the US, the index serves as a strong indicator of overall dividend trends in the market.
The long-term value of dividend-paying stocks remains strong, particularly for investors seeking to reduce risk without giving up on growth potential. Ramona Persaud, portfolio manager of the Fidelity Equity-Income Fund and Fidelity Global Equity Income Fund, tends to favor high-quality companies that offer solid dividends and are reasonably priced. She pointed out that falling interest rates can create a favorable environment for dividend stocks, as their yields become more attractive compared to bonds. Persaud also noted that lower rates could help broaden market gains, unlike the recent trend where performance was largely driven by a few mega-cap growth names.
Her investment approach centers on companies with strong balance sheets, consistent cash flows, and high return potential. She also emphasized the importance of valuation—looking for stocks that are well-priced relative to their peers and historical levels—while seeking dividend yields that stand out in the current market. This combination of quality, value, and income has, according to her, helped the fund perform well in both rising and falling markets. She made the following comment about dividend stocks and their appeal:
“Ideally, I look for a stock that has a combination of these factors. I can’t always get all 3, so I look for a good balance of them. If I can get higher quality at a cheaper price, and the company pays a compelling dividend, that’s when a stock is really interesting to me.”
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Our Methodology
To compile this list, we screened for dividend stocks that have strong financials and solid dividend policies. From that group, we picked 10 companies that were most popular among billionaire investors, as per Insider Monkey’s billionaire database of Q4 2024. The stocks are ranked according to the number of billionaires having stakes in them.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
NextEra Energy, Inc. (NYSE:NEE)
Number of Billionaire Holders: 17
NextEra Energy, Inc. (NYSE:NEE) ranks seventh on our list of the best dividend stocks according to billionaires. The company runs one of the largest electric utilities in the US, Florida Power & Light, which benefits from stable, government-regulated rates and consistent electricity demand—resulting in dependable cash flow. Alongside that, the company owns a significant portfolio of energy infrastructure through NextEra Energy Resources, supported by long-term, fixed-rate contracts. Together, these operations generate resilient cash flow that holds up well even during economic slowdowns.
In the fourth quarter of 2024, NextEra Energy, Inc. (NYSE:NEE) delivered mixed results. Adjusted earnings per share came in at $0.53, in line with expectations, but revenue fell short—dropping 21.7% year-over-year to $5.39 billion, missing forecasts by $2.53 billion. Despite this, NextEra still managed to grow its full-year 2024 adjusted EPS by over 8% compared to the previous year. Since 2021, the company has maintained a compound annual EPS growth rate of over 10%, leading among the top 10 power producers.
With $13.2 billion in operating cash flow for fiscal 2024, NextEra Energy, Inc. (NYSE:NEE) remains a strong option for income-focused investors. It also plans to increase its dividend per share by roughly 10% each year through 2026. In February, the company raised its quarterly dividend by 10% to $0.5665 per share, marking its 29th straight year of dividend growth. As of April 15, the stock has a dividend yield of 3.35%.
Overall, NEE ranks 7th on our list of the best long term dividend stocks according to billionaires. While we acknowledge the potential of NEE as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than NEE but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
