Why NextEra Energy Partners Stock Dropped 5.4% Today
Shares of renewable energy project owner NextEra Energy Partners (NYSE: NEP) dropped as much as 5.4% in trading on Monday as investors worried that inflation data due this week will cause the Federal Reserve to increase interest rates again.
Tomorrow, the closely watched U.S. Consumer Price Index reading will come out, which is a key input to the Federal Reserve's decision to increase interest rates or not. High inflation can push the Fed to raise rates, and a 0.4% month-over-month increase in inflation back in September is reason for worry about the upcoming numbers.
For NextEra Energy Partners, the reason interest rates are so important is the company has $2.2 billion in debt coming due before 2026, and the company will likely see interest rates jump dramatically when that happens. This will reduce cash available for distribution and ultimately the dividend, which currently yields 14.3%. So the stock can move wildly based on the ups and downs of interest rates.
Source Fool.com
