NEE vs SRE: Dividend Comparison
Dividend data as of
Nextera Energy Inc (NEE) and Sempra (SRE) are both in the Utilities sector, making them natural rivals for dividend investors. SRE edges ahead on yield at 2.85% versus NEE's 2.49%. For dividend growth, NEE leads with a 5-year CAGR of 10.2% versus SRE's 4.1%. Both stocks carry a "Moderate" dividend safety rating. NEE is a Dividend Aristocrat while SRE is a Dividend Contender.
Verdict
Yield Analysis
SRE yields 0.35% more than NEE. In dollar terms, NEE pays $2.27/share vs SRE's $2.56/share annually.
Dividend Growth
NEE: Dividend growth has been steady, with a 3-year CAGR of 10.1% and a 5-year CAGR of 10.2% (10-year: 11.2%).
SRE: Dividend growth has been steady, with a 3-year CAGR of 4.1% and a 5-year CAGR of 4.1% (10-year: 6.1%).
Dividend Safety
NEE: The payout ratio of 69% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.4x.
SRE: The payout ratio of 79% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.3x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in NEE vs SRE today?
At $93.81 per share, $10,000 buys about 106.6 shares of Nextera Energy Inc (NEE). Each share pays $2.27 per year in dividends, so the position starts out generating roughly $242 per year — about $20 a month.
At $94.71 per share, $10,000 buys about 105.6 shares of Sempra (SRE). Each share pays $2.56 per year in dividends, so the position starts out generating roughly $270 per year — about $22 a month.
SRE is the larger income stream from day one: $28 per year more on the same $10,000 invested.
What could $10,000 of NEE or SRE income look like in 10 years?
Nextera Energy Inc (NEE) has raised its dividend about 10.2% a year over the past five years. If that pace held, the $249 per year that $10,000 generates today at the current 2.49% yield would reach $657 per year by 2036 — a 6.6% yield on the original cost.
Sempra (SRE) has raised its dividend about 4.1% a year over the past five years. If that pace held, the $285 per year that $10,000 generates today at the current 2.85% yield would reach $424 per year by 2036 — a 4.2% yield on the original cost.
On those trailing rates, NEE pays more in 2036: $657 versus $424 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would NEE's dividend growth overtake SRE's higher yield?
Nextera Energy Inc (NEE) yields less today (2.49% vs 2.85%) but has grown its dividend faster — 10.2% vs 4.1% a year over the past five years. If both trends continued, a $10,000 position in NEE would start out-earning the same position in SRE around 2029 (roughly 3 years from now), paying about $334 per year at the crossover. Before that point, SRE pays more each year; after it, the gap compounds in NEE's favor.
Can NEE and SRE afford their dividends?
Nextera Energy Inc (NEE) earns $3.28 per share against $2.27 paid out in dividends — 1.4x coverage (a 69% payout ratio).
Sempra (SRE) earns $3.25 per share against $2.56 paid out in dividends — 1.3x coverage (a 79% payout ratio).
Coverage is similar for both, so neither dividend looks meaningfully more stretched than the other on current earnings.
Which fits an early-retirement income portfolio better, NEE or SRE?
For income you need right now, Sempra (SRE) leads: $100,000 invested today pays about $237 a month at the current 2.85% yield, versus $208 a month from Nextera Energy Inc (NEE) at 2.49%.
With a decade or more before the income is needed, NEE's faster dividend growth (10.2% vs 4.1% a year) matters more than the starting yield — raises compound into the larger paycheck over time.
On consistency: NEE has raised its dividend 30 consecutive years; SRE has raised its dividend 15 consecutive years.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $840/yr in NEE vs $562/yr in SRE by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
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