This renewables stock will make three kinds of investors happy, JPMorgan says
JPMorgan says three distinct investors types will find something to like in NextEra Energy Partners: energy industry investors, income hunters and those focused on environmental factors. "We believe the stock should appeal to a broad array of yield, energy and ESG investors," analyst Mark Strouse said in a note Friday. The Wall Street firm assumed coverage of the stock with an overweight rating and December 2024 price target of $73 — suggesting nearly 18% upside from Thursday's close. Shares are down more than 10% year to date, and JPMorgan believes that pullback has created an attractive entry point. " NEP provides investors access to downstream ownership of renewable projects, offering high-quality cash flows and industry-leading dividend growth, supported by the company's strong relationship with NextEra Energy ," Strouse wrote. NEP YTD mountain NextEra Energy Partners NextEra Energy Partners is a limited partnership formed by NextEra Energy. It invests in solar and wind projects, as well as natural gas infrastructure assets. The stock currently has a 5% dividend yield. Strouse likes the access to downstream ownership because those assets tend to be less volatile than investing in upstream renewable products, he said. NEP's access to NextEra Energy subsidiary NextEra Energy Resources is also bullish because the latter is "best in class developer, owner, and operator of renewable assets," Strouse said. "Its scale, technological advantage and decades of experience allow it to generate industry-leading returns," Strouse wrote. NEP buys projects developed by NextEra Energy Resources. The company also consistently raises its dividend, he pointed out. "NEP expects 12-15% dividend growth through FY26, above industry average of high-single digits," Strouse said. — CNBC's Michael Bloom contributed reporting.