Our selection of NextEra Energy (NEE) is partially defensive; I think that after 2020’s strong finish, a substantial market correction — or worse — is likely, explains Timothy Lutts, editor of Cabot Stock of the Week.

This recommendation is also partially offensive, in that I think this sector has some very good growth coming in the years ahead.

The sector, of course, is electric utilities; NextEra is the largest in the U.S., with Florida Power & Light its largest division.

The company has a firm growth trend in place today (average annual revenue growth over the past five years was 3%), but I expect that to accelerate in the years ahead as demand from the electric vehicle market grows; Elon Musk thinks demand for electricity could double!

And as costs fall — NextEra Energy is big into renewable energy, where scale is bringing costs down — profits should mushroom!

Valuation is a little high now based on the past five years’ average, but technically the stock’s uptrend is solid, though given a choice, I’d wait for a pullback to the 50-day moving average.

Subscribe to Cabot Stock of the Week here…

MoneyShow’s Top 100 Stocks for 2021

The top performing newsletter advisors and analyst are back, and they just released their best stock ideas for 2021. Get your FREE copy of MoneyShow’s 2021 Top Picks report here and see why the nation's leading investment experts believe these stocks will significantly outperform the market in 2021.