If you had invested in Florida-based utility NextEra Energy
NEE
a decade ago, your total return, including dividends, would have been 600%. That is a phenomenal return for an energy company.

In contrast, if you had invested in ExxonMobil
XOM
a decade ago, you have seen the share value decline by half. Add in the dividends, and the total 10-year return in ExxonMobil is -25%.

The stark divergence in performance led to something that would have been unimaginable a decade ago. This week NextEra’s market capitalization surpassed ExxonMobil’s to become the largest U.S. energy company. By the end of the week, ExxonMobil’s value was back on top, but if the trends are any indication, that position will be temporary.

How did this happen?

ExxonMobil’s fall, more than anything, is a function of the ongoing Covid-19 pandemic. Although the company’s performance in the decade before 2020 was lackluster, the company was still worth just over $300 billion when the year began. Nine months later that value is $140 billion as the company grapples with the decline in energy demand brought on by the pandemic.

What did NextEra do right? As a disclaimer, I will note that NextEra has long been the #1 ranked stock pick in our Growth Portfolio at Utility Forecaster. As a result, I have written in great detail about the company. The following is a brief excerpt from an analysis I carried out that explains why NextEra has thrived.

Over the past 15 years, the world has moved to cleaner electricity. Arguably no company has navigated this transition in the U.S. better than NextEra. In the process, it became