Long-term profit growth is like water to a thirsty investor’s soul – vital for nourishing your financial future. Thus, focusing on stocks with visible earnings growth can be likened to planting seeds for a bountiful harvest.
NextEra Energy: A Beacon of Dividend Growth in the Utility Sector
NextEra Energy, a unique blend of a steady regulated utility and a swiftly expanding renewable energy powerhouse, has caught the eye of many investors for its impressive dividend growth track record. Over the past decade, the company has managed to grow its dividend at a brisk annualized rate of 10%, outshining many peers in the industry. This momentum, incorporating a historically high yield, adds a refreshing flavor of diversification to any investor’s portfolio. With an expected 10% dividend growth rate in 2024 and solid earnings growth projections through 2026, this utility gem shines brightly even in the traditionally dull utility sector.
Clearway Energy: Harnessing the Power of Renewables
Clearway Energy, a prominent player in the renewable energy space, stands tall as one of the largest renewable energy generators in the nation. Its robust portfolio of clean energy assets generates stable cash flow, underpinned by fixed-rate power purchase agreements with utilities and corporate giants. The company’s strategic capital recycling approach has paved the way for robust dividend growth, with expectations set for continued growth between 5% to 8% annually through 2026. Armed with a vision for growth beyond 2026 and a plethora of investment opportunities in the realm of renewable energy, Clearway Energy’s journey is infused with promise. With its shares currently down 30%, a result of external factors like rising interest rates, Clearway presents an enticing opportunity for long-term investors.
Ford Motor Company: Accelerating Towards Success
Ford Motor Company, an iconic name in the automotive industry, has been revving up its engines with a 19% rally in stock price over the past three months. Following promising figures for the fourth quarter and full year 2023, Ford seems poised for a bullish run ahead. Overcoming challenges both on a macroeconomic scale and internally, the company’s recent performance signals a positive trajectory, hinting at a potentially fruitful path for investors.
Ford Cuts Costs to Drive Profit Growth Amid Economic Slowdown
Despite an economic downturn in 2023, Ford managed to increase its revenue by an impressive 11% and turn a net profit of $4.3 billion, a significant recovery from a net loss of $2 billion the previous year. The company also surpassed expectations by generating adjusted free cash flow (FCF) of $6.8 billion, exceeding its own guidance by a substantial margin. In a move to reward its shareholders, Ford declared a supplemental dividend for the first quarter.
Cost-cutting Measures Boost Profitability
While maintaining robust demand for its vehicles, Ford strategically reduced costs and scaled back capital spending in slower markets to enhance overall profitability and returns in 2023. Notably, the company now aims to trim spending on electric vehicles, given the global economic slowdown, and shift its focus to more lucrative ventures like Ford Pro. Ford Pro, the commercial vehicles segment of the company, stands out for its ability to generate substantial recurring revenue. Ford is projecting adjusted earnings before interest and tax (EBIT) of $10 billion to $12 billion in 2024, up from $10.4 billion in the previous year. Additionally, the company anticipates adjusted FCF in the range of $6 billion to $7 billion. Ford remains committed to returning 40% to 50% of adjusted FCF in dividends to its shareholders.
Upcoming Product Launches Fuel Investor Confidence
With a series of important product launches on the horizon for 2024, including a new iteration of its popular F-150 pickup truck, Ford is poised for further growth and solid performance in the near future. These developments position Ford as an appealing investment opportunity for 2024 and beyond.
Investment Outlook Beyond Ford: NextEra Energy
While Ford’s financial trajectory is on an upward swing, investors may also want to consider other opportunities in the market. NextEra Energy, although not highlighted as one of the top 10 stocks by the Motley Fool Stock Advisor, presents a viable investment option with the potential for significant returns in the years to come.
The Motley Fool’s Stock Advisor service offers investors a comprehensive roadmap for success, providing actionable insights on portfolio construction, regular analyst updates, and two new stock picks each month. This service has outperformed the S&P 500 by a wide margin since its inception in 2002, showcasing its effectiveness in guiding investors towards profitable opportunities.
As investors weigh their options, it’s essential to consider the diverse landscape of investment prospects, leveraging insights from trusted sources such as the Motley Fool to navigate the dynamic market environment successfully.