Then and Now – NexEra Energy
Hey Everyone,
Welcome to another Then and Now post, a continuation of my series where I revisit some older blogposts and either rip them to shreds (because my thinking has totally changed on such subjects, including key stocks) or I’ll confirm my position on some specific stocks or ETF investments.
You can read about my previous Then and Now posts on certain stocks (the good, and the not-so-good!) throughout this post and I’ll link to a few at the end.
Time and again, I say on this site, any individual DIY stock selection comes with risks but there are upsides to be had too… 🙂
Today’s post is about my ownership to date in U.S. utility stock: NextEra.
Then and Now – NextEra Energy
A bit out NextEra (NEE) from their site:
“NextEra Energy, Inc. (NYSE: NEE) is a leading clean energy company headquartered in Juno Beach, Florida. NextEra Energy owns Florida Power & Light Company, which is America’s largest electric utility that sells more power than any other utility, providing clean, affordable, reliable electricity to approximately 5.8 million customer accounts, or more than 12 million people across Florida. NextEra Energy also owns a competitive clean energy business, NextEra Energy Resources, LLC, which, together with its affiliated entities, is the world’s largest generator of renewable energy from the wind and sun and a world leader in battery storage.”
That’s what they do. 🙂
Unlike other U.S. stocks (including those I’ve kicked to the *curb in recent years in favour of more indexed ETFs) I haven’t owned NextEra (NEE) as long as other U.S. holdings.
*As an example, I sold out of all JNJ stock here/below back in 2023:
Then – NextEra
My records show I made my first purhcase of NextEra Energy stock in mid-2017, a couple of years before the pandemic hit. I hold this stock like other remaining U.S. stocks (such as Walmart (WMT)) inside our RRSPs.
I own our U.S. stocks there for a few reasons:
- No withholding taxes. By owning U.S. stocks or U.S.-listed ETFs inside my RRSP (or eventually my RRIF) I don’t need to worry about losing 15% foreign withholding taxes on dividends or distributions paid.
- I own Canadian stocks and Canadian-listed ETFs in other accounts such as our TFSAs (for tax-free dividends) and taxable accounts (for tax efficient dividends).
I decided to buy NEE in the summer of 2017 since I believed like some of the Canadian utilities I continue to hold (examples include Fortis (FTS), Capital Power (CPX), Emera (EMA)), there was steady bond-like income to be earned over time along with some growth via utility stocks – to help fund my future retirement with.
I’ve mentioned a few times on this site, that pre-pandemic, I learned some very important lessons with my lack of foreign stock diversification and as a result I decided to bolster my portfolio then through mainly low-cost ETFs although I would continue to make a few strategic U.S. stock choices along the way. Adding NEE was one of them along with the names I’ve mentioned above: Walmart, Waste Management and Berkshire.
Long-term, we’ll see if I hold any U.S. stocks at all…I have been hinting a just owning one low-cost ETF for ex-Canada investing.
Now – NextEra
I’ve been a NEE shareholder for about 7 years now and the results, especially in 2024 with interest rates coming down, are really powering the share price higher.
At the time of this post, the NEE stock price is up a whopping 38% YTD and up around 50% or so over the last 5-years. The share price has more than doubled in the last 7 years; adjusted for the 4-for-1 stock split I got in 2020.
Source: Google Finance.
As interest rates continue to fall in the U.S. just as they are expected to do here at home in the coming months, we might just see NEE stock hit an all-time-high (ATH).
Then and Now – NextEra Energy Summary
Will NextEra continue to thrive?
Would I be better off owning a low-cost ETF instead?
Will QQQ or other ETFs provide better returns than NEE over time?
With slight changes made to our portfolio over the years, pre-pandemic and post, I’m now down to owning a handful of individual U.S. stocks in favour of keeping more low-cost ex-Canada ETF units for the simple, lazy diversification benefits they provide beyond Canadian borders.
In fact, beyond the Canadian stocks I own, I could see a time in the coming years as I prepare for semi-retirement whereby all of our U.S. stocks are sold by early 2025 to a. meet retirement income spending needs from our RRSPs and b. to simplify our RRSP/RRIF assets as we drawdown those accounts in our 50s and 60s.
So, I might sell at this level, soon!!
After all U.S. stocks are sold in the coming years I will simply keep low-cost ETFs like XAW or QQQ “until the end” inside my registered accounts…
I look forward to your portfolio updates as well and read every single one of them in the comments. 🙂
Mark
Further Reading:
Some of my stocks I own and why are found on my standing My Dividends page here.
I answer reader questions about our monthly dividend income updates and more on my FAQs page.
When it comes to Canadian energy stocks, I shared why I still own Canadian Natural Resources (CNQ) here.
I enjoy owning low-volatility, higher growth stocks like Waste Connections (WCN).
But not every individual purchase is a good one. Far from it! Read on about H&R REIT – and why I kicked this company to the curb and no longer own it.
