The ongoing transformation of the energy sector toward lower-carbon solutions is expected to span multiple decades, creating significant growth opportunities for companies investing heavily in clean energy infrastructure. Among the prominent players benefiting from this paradigm shift are Brookfield Renewable and NextEra Energy. Both firms have established themselves as leaders in renewable energy investment and development, making them noteworthy choices for investors aiming to commit $1,000 or more with an intention to hold indefinitely.
Brookfield Renewable: A Platform for Predictable Growth
Brookfield Renewable operates one of the world’s most extensive renewable energy and sustainable solutions platforms. Its asset base generates reliable and gradually increasing cash flows, grounded on long-term contracts that incorporate inflation adjustments. Such contractual frameworks allow Brookfield to maintain and grow an attractive dividend, which currently yields close to 4%. Historical data reflects a consistent pattern, as the company has elevated its dividend payout by at least 5% annually since 2011.
Beyond inflation-linked contract escalations, Brookfield targets multiple avenues for growth. These include efforts to improve profit margins, leveraging an expansive development pipeline, and pursuing strategic acquisitions. Together, these factors underpin expectations for greater than 10% annual Funds From Operations (FFO) per share growth through at least the year 2030. Moreover, the company anticipates sustaining robust growth well beyond this horizon.
Strong earnings growth serves as the foundation for Brookfield’s intention to perpetuate dividend increases in the range of 5% to 9% annually. This blend of a high dividend yield with solid growth prospects positions Brookfield Renewable as a stock with the potential for substantial total returns over the next decade and beyond.
NextEra Energy: Combining Stable Utilities with Clean Energy Innovation
NextEra Energy stands out as the operator of the United States’ largest electric utility, Florida Power & Light (FPL), as well as a leading developer in clean energy infrastructure through NextEra Energy Resources. The utility business provides steady, rate-regulated revenues, while the energy resources segment contributes consistent cash flow, underpinned by long-term contracts. This dual structure supports a reliable and steadily increasing dividend, which today yields just under 3%.
Over the past two decades, NextEra Energy has demonstrated a strong track record, having grown its dividend at a compound annual growth rate of approximately 10%. Looking ahead, the company has laid out ambitious capital expenditure plans to address rising power demand. These plans include the development of new renewable energy and natural gas generation facilities, enhancements to electricity and gas transmission networks, and investments in artificial intelligence data centers.
Such growth initiatives underpin NextEra Energy's forecast to increase adjusted earnings per share by over 8% annually at least through 2035. Correspondingly, the company plans to raise its dividend by 10% in the current year, followed by a compound annual growth rate of about 6% through 2027 and 2028. This combination of steady income and growth positions NextEra Energy to deliver strong overall returns to shareholders for years to come.
Positioned for a Long-Term Energy Transition
Brookfield Renewable and NextEra Energy are strategically placed to capitalize on the accelerating global shift towards cleaner energy sources and the expected increase in power consumption. Their large scale, diversified renewable portfolios, and solid financial structures—featuring inflation-linked contracts and rate-regulated revenues—provide financial stability and growth potential. For investors seeking to deploy capital in the energy sector with a long-term horizon, a combined investment in these entities could transform an initial $1,000 outlay into a significantly larger amount over subsequent decades.