This Nearly 14%-Yielding Dividend's Future Remains Uncertain
NextEra Energy Partners (NYSE: NEP) pays a monster dividend. It currently yields nearly 14%, which is more than 10 times higher than the S&P 500's 1.3% dividend yield.
The renewable energy producer plans to continue increasing its prodigious payout at around a 6% annual rate in the near term. However, it's also evaluating alternatives to lower its cost of capital, which is a big reason its yield is so high. Opting for a different pathway could also lead the company to cut its payout.
NextEra Energy Partners' CEO, John Ketchum, discussed the company's plans on the second-quarter conference call. He noted that the company had made progress on its current strategy of organically growing its earnings while simultaneously taking steps to shore up its financial foundation. Ketchum stated: "Since our last earnings call, the partnership completed the next NEP Renewables II equity buyout of roughly $190 million in June 2024 and paid down our 2024 convertible maturity with cash on hand. After repayment of a $700 million holdco debt maturity earlier this month, the partnership now has approximately $2.7 billion of liquidity."
Source Fool.com
