1 Top Energy Stock I Wouldn't Hesitate to Buy in June

We use a lot of energy each and every day to power our modern lives. From the gasoline that fuels our cars to the natural gas that heats our homes to the electricity that runs our devices, we can't function in our modern society without energy.

Our need for energy in the country is only growing. According to forecasts by IHS Outlook and McKinsey, U.S. power demand will surge 55% by 2040, fueled by AI data centers, the onshoring of manufacturing, and the electrification of everything, including transportation.

This forecast bodes well for energy companies. As a leader in the sector, NextEra Energy (NYSE: NEE) is in a strong position to capitalize on the country's growing demand for electricity. That's one of the reasons why I wouldn't hesitate to buy this top energy stock in June.

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The quintessential energy stock

NextEra Energy is a powerhouse in the energy sector. It operates the largest electric utility in the country -- Florida Power & Light (FPL). It also operates NextEra Energy Resources, a leading North American clean energy company. Together, these businesses make NextEra Energy the world's largest producer of renewable energy from the wind and sun and a global leader in battery storage. The company also operates the largest natural gas-fired fleet in the country and has a leading nuclear energy business. These features make NextEra Energy "the quintessential, 'all-forms-of-energy' company," commented CEO John Ketchum on the company's first-quarter earnings conference call.

The company doesn't just operate leading energy businesses; it knows how to grow them. No one has built more renewable energy-generation capacity than NextEra Energy over the past couple of decades. It has also built more gas-fired generation than any other company in the past 20 years.

NextEra's investments to grow its business have paid big dividends for shareholders. The company has grown its adjusted earnings per share (EPS) at a 9% compound annual rate over the past 20 years. That has helped power a roughly 10% compound annual growth rate (CAGR) in its dividend during that period. The company's rising income and earnings have helped fuel market-crushing total returns for its shareholders (15.7% annualized versus 10.2% for the S&P 500).

Powerful growth ahead

NextEra Energy's leadership in all forms of energy puts it in a strong position to capture a meaningful share of the growth it sees ahead for power demand. The company estimates that the U.S. will need to add 450 gigawatts (GW) of new power generation capacity to the grid by 2030 to keep up with current demand forecasts. While it will require all forms of energy to meet this demand, renewable energy, especially solar energy, will do most of the heavy lifting because of its lower costs and ability for rapid deployment.

That outlook bodes well for NextEra Energy, a leader in solar. FPL has installed over 7.9 GW of solar to capture Florida's abundance of sunshine and help meet the state's power needs. That's the largest utility-owned solar portfolio in the country. FPL plans to deploy more than 17 GW of solar and over 7.6 GW of battery storage in the next 10 years to meet the state's power needs. In addition, NextEra's energy-resources segment has 28 GW of renewable energy projects under development that it expects to bring online over the next few years.

The company plans to invest a staggering $120 billion over the next four years into maintaining and expanding America's energy infrastructure. This investment should power adjusted EPS growth at or near the top end of its 6% to 8% annual target range through 2027. That should give the company the power to continue growing its dividend (which at an over 3% yield is more than double the S&P 500's -1.5% yield) by around 10% annually through at least next year. Given the expected surge in power demand, the company should have ample opportunities to continue growing at a strong rate well beyond that time frame.

Leading the charge

NextEra Energy is a leader in the U.S. energy sector. That puts it in a strong position to capitalize on the expected surge in power demand over the next couple of decades. The company has an exceptional record of investing money to grow its business in a way that generates strong returns for shareholders. Because of that, I wouldn't hesitate to buy shares of this top energy stock in June.

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Matt DiLallo has positions in NextEra Energy. The Motley Fool has positions in and recommends NextEra Energy. The Motley Fool has a disclosure policy.