Why NextEra Energy Partners Stock Jumped More Than 25% This Week
After falling off the cliff in recent weeks, shares of NextEra Energy Partners (NYSE: NEP) rebounded dramatically this week and were trading 25% higher through 1 p.m. ET Friday after hitting a weekly high of 26.9%, according to data provided by S&P Global Market Intelligence. The renewable-energy stock lifted investors' hopes by delivering strong numbers for its third quarter and revealing how it plans to achieve its recently updated annual dividend-growth goal through 2026.
NextEra Energy Partners stunned the markets last month when it said it expects to grow its annual dividend per share through 2026 by only 5% to 8% with a target of 6%, down from its previous guidance of 12% to 15% growth. Higher interest rates, in particular, have made funding costly for the company, compelling it to reduce its dividend-growth goal. However, NextEra Energy Partners emphasized how it doesn't expect to issue fresh equity until 2027 to meet its revised growth plans. It also revealed plans to focus on organic growth, specifically repowering its wind assets to boost cash available for distribution (CAFD) instead of relying solely on acquisitions through drop-down transactions from its parent company, NextEra Energy (NYSE: NEE).
The dividend-growth cut, of course, sent NextEra Energy Partners stock crashing, and it had lost a whopping 40% since Sept. 27 through the end of last week. Its dividend yield shot up to double digits.
Source Fool.com
