NEE vs SRE: Dividend Yield, Growth & Safety Comparison
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.
Key Metrics Comparison
| Metric | NEE | SRE |
|---|
| Dividend Yield | 2.49% | 2.85% |
| Annual Dividend | $2.27 | $2.56 |
| 5-Year CAGR | 10.2% | 4.1% |
| Payout Ratio | 69% | 79% |
| Consecutive Years | 30 | 15 |
| Price | $93.81 | $94.71 |
Yield Comparison
Sempra (SRE) currently yields 2.85%, which is solid for the broader market. That's 0.35% more than Nextera Energy Inc (NEE), which yields 2.49%. In dollar terms, SRE pays $2.56/share annually versus NEE's $2.27/share.
Dividend Growth
Over the past five years, NEE has grown its dividend at a 10.2% CAGR compared to SRE's 4.1%. 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's dividend safety is rated "Moderate." 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's dividend safety is rated "Moderate." 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. NEE's payout ratio of 69% is more conservative than SRE's 79%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in SRE generates approximately $285/year in dividend income, compared to $249/year from NEE — a difference of $36/year. At $100,000, that gap widens to $360/year.
Verdict
- Best for income: SRE
- Best for growth: NEE
- Best for safety: NEE
Frequently Asked Questions
Which has a higher dividend yield, NEE or SRE?
Sempra (SRE) has a higher dividend yield of 2.85% compared to Nextera Energy Inc (NEE) at 2.49%.
Is NEE or SRE a better dividend growth stock?
Nextera Energy Inc has the stronger dividend growth with a 5-year CAGR of 10.2%, compared to Sempra's 4.1%.
Which is safer for dividend income, NEE or SRE?
Nextera Energy Inc's dividend safety is rated "Moderate" while Sempra is rated "Moderate." 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. 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.
How much income does $10,000 in NEE vs SRE generate?
A $10,000 investment in NEE generates approximately $249/year in dividends, while the same amount in SRE generates about $285/year.
Is NEE or SRE a Dividend Aristocrat?
Nextera Energy Inc is a Dividend Aristocrat (30 years) and Sempra is a Dividend Contender (15 years).
Which has a lower payout ratio, NEE or SRE?
Nextera Energy Inc has a lower payout ratio of 69% compared to Sempra's 79%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
NEE vs SRE: which is better for retirement income?
It depends on your priorities. SRE for current income, NEE for dividend growth, NEE for safety. Many retirement investors hold both for diversification.
NEE Dividend Analysis | SRE Dividend Analysis | All Comparisons | Comparison Tool