Many investors are realizing that they may do well financially while simultaneously doing good through environmental, social, and corporate governance (ESG) investing, which is gaining popularity.
Some of the best ESG stocks offer reliable dividends that can be used as a source of passive income. NextEra Energy is a good example because it is the largest wind and solar energy generator in the world.
Learn the steps to taking advantage of this renewable energy pioneer’s dividend payouts of up to $1,000 monthly.
The Rise of ESG Investing
Growth in ESG investing has skyrocketed in recent years, reflecting a shift in cultural emphasis. Climate change, diversity, and executive pay are just a few of the growing list of topics that investors want their money to reflect.
The ESG framework analyzes businesses using environmental, social, and corporate governance performance indicators. Environmental standards take into account things like carbon footprints and long-term viability.
In terms of social factors, we look at things like working conditions and volunteerism. Governance factors in executive compensation, shareholder rights, and other factors.
ESG investors are motivated by a desire to do good in the world rather than by a desire for financial gain alone. But even ethically responsible stock options can provide financial returns.
There are several long-lasting market leaders among companies that fulfill progressive standards. Although top ESG stocks may experience share price volatility, they have the potential to generate total returns that outperform the market.
NextEra Energy: The Global Renewable Energy Giant
NextEra Energy Inc. (NYSE:NEE), based in Juno Beach, Florida, is a classic example. NextEra provides energy to millions of people through its subsidiaries such as Florida Power & Light Co. However, the company’s subsidiary, NextEra Energy Resources LLC, is the largest wind and solar power generator in the world.
Across the United States and Canada, NextEra controls about 50 GW of producing capacity. The company operates the largest solar production plant in North America in Florida, and it is actively increasing its renewable portfolio.
To aid in the switch to renewable energy, NextEra is also making significant investments in energy storage.
Paying Dividends While Doing Good
The stock price of NextEra Energy has been falling, dropping 20% in the past month alone. On the other hand, experts predict a recovery. The stock of NextEra was just reaffirmed at Overweight by Morgan Stanley, with a price objective of $91. This represents a 66% increase from current levels.
In addition to the possibility of financial appreciation, NextEra also provides dividends to its investors. A quarterly dividend in the amount of $0.4675 per share was announced on October 14th. This dividend yields 3.4% annually based on the stock price of $55.
NextEra’s dividends offer a reliable source of passive income for ESG investors. The dividend yield on a $350,000 investment in NextEra shares is approximately $1,000 per month.
Here’s how the math works:
- NextEra pays $0.4675 per share quarterly
- To earn $1,000 monthly, you need $3,000 quarterly
- $3,000 / $0.4675 per share = 6,417 shares
- At around $55 per share, 6,417 shares costs about $350,000
Therefore, an ESG investor could receive $1,000 in dividend income every month by purchasing 350,000 shares of NextEra Energy at a price of $32.50 per share. These periodic distributions provide as a buffer against short-term fluctuations in the stock price.
Of course, dividends are never assured, and the preceding scenario is merely illustrative. However, it exemplifies the potential for passive income from leading ESG stocks such as NextEra.
Companies like NextEra offer dividends and principles to investors who prioritize the alignment of their finances and values.
Key Takeaways: Earn Passive Income from ESG Investing
- Increased attention on environmental, social, and governance factors has led to a rise in ESG investments.
- Long-term returns and dividends from top ESG firms like NextEra Energy can be substantial.
- NextEra dominates the wind and solar energy markets worldwide.
- The dividend payout frequency is quarterly, and the most recent annual dividend yield was 3.4%.
- If you invest $350,000 in NextEra shares, you may receive $1,000 in dividends per month.
- Investing in NextEra and other ESG equities is a great way to support companies that share your values while also earning a passive income stream.
Companies like NextEra Energy are attractive possibilities for investors who care about the environment and want to see a return on their money. The rise of ESG investing is changing the game and demonstrating that you can make money and make a difference at the same time.