NEXTERA ENERGY INC (NEE) Stock Fundamental Analysis
NYSE:NEE - New York Stock Exchange, Inc. - US65339F1012 - Common Stock - Currency: USD
Taking everything into account, NEE scores 3 out of 10 in our fundamental rating. NEE was compared to 47 industry peers in the Electric Utilities industry. There are concerns on the financial health of NEE while its profitability can be described as average. NEE is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year NEE was profitable.
In the past year NEE had a positive cash flow from operations.
NEE had positive earnings in each of the past 5 years.
NEE had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
NEE has a Return On Assets (2.84%) which is in line with its industry peers.
The Return On Equity of NEE (11.06%) is better than 65.96% of its industry peers.
The Return On Invested Capital of NEE (3.84%) is worse than 63.83% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NEE is significantly below the industry average of 38.54%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.84% | ||
| ROE | 11.06% | ||
| ROIC | 3.84% |
ROA(3y)3.46%
ROA(5y)3.04%
ROE(3y)13.28%
ROE(5y)11.49%
ROIC(3y)3.99%
ROIC(5y)3.56%
1.3 Margins
NEE's Profit Margin of 21.81% is amongst the best of the industry. NEE outperforms 91.49% of its industry peers.
NEE's Profit Margin has improved in the last couple of years.
NEE has a better Operating Margin (29.26%) than 93.62% of its industry peers.
In the last couple of years the Operating Margin of NEE has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.26% | ||
| PM (TTM) | 21.81% | ||
| GM | N/A |
OM growth 3Y19.72%
OM growth 5Y1.81%
PM growth 3Y10.26%
PM growth 5Y7.41%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
NEE has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for NEE has been increased compared to 1 year ago.
NEE has more shares outstanding than it did 5 years ago.
The debt/assets ratio for NEE is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.06, we must say that NEE is in the distress zone and has some risk of bankruptcy.
With a decent Altman-Z score value of 1.06, NEE is doing good in the industry, outperforming 63.83% of the companies in the same industry.
NEE has a debt to FCF ratio of 20.36. This is a negative value and a sign of low solvency as NEE would need 20.36 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 20.36, NEE is in the better half of the industry, outperforming 76.60% of the companies in the same industry.
A Debt/Equity ratio of 1.65 is on the high side and indicates that NEE has dependencies on debt financing.
With a Debt to Equity ratio value of 1.65, NEE is not doing good in the industry: 63.83% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.65 | ||
| Debt/FCF | 20.36 | ||
| Altman-Z | 1.06 |
ROIC/WACC0.55
WACC7.04%
2.3 Liquidity
A Current Ratio of 0.55 indicates that NEE may have some problems paying its short term obligations.
NEE has a worse Current ratio (0.55) than 82.98% of its industry peers.
A Quick Ratio of 0.45 indicates that NEE may have some problems paying its short term obligations.
NEE has a Quick ratio of 0.45. This is amonst the worse of the industry: NEE underperforms 80.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.55 | ||
| Quick Ratio | 0.45 |
3. Growth
3.1 Past
NEE shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 8.00%.
NEE shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.36% yearly.
The Revenue has decreased by -6.86% in the past year.
The Revenue has been growing slightly by 5.21% on average over the past years.
EPS 1Y (TTM)8%
EPS 3Y10.53%
EPS 5Y10.36%
EPS Q2Q%8.79%
Revenue 1Y (TTM)-6.86%
Revenue growth 3Y13.19%
Revenue growth 5Y5.21%
Sales Q2Q%9%
3.2 Future
Based on estimates for the next years, NEE will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.33% on average per year.
Based on estimates for the next years, NEE will show a small growth in Revenue. The Revenue will grow by 7.28% on average per year.
EPS Next Y7.9%
EPS Next 2Y8.23%
EPS Next 3Y8.55%
EPS Next 5Y8.33%
Revenue Next Year4.17%
Revenue Next 2Y6.71%
Revenue Next 3Y7.44%
Revenue Next 5Y7.28%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 21.30, NEE is valued on the expensive side.
76.60% of the companies in the same industry are cheaper than NEE, based on the Price/Earnings ratio.
NEE is valuated rather cheaply when we compare the Price/Earnings ratio to 27.29, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 18.61, NEE is valued on the expensive side.
72.34% of the companies in the same industry are cheaper than NEE, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 21.74. NEE is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.3 | ||
| Fwd PE | 18.61 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NEE indicates a rather expensive valuation: NEE more expensive than 85.11% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, NEE is valued a bit cheaper than 78.72% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.93 | ||
| EV/EBITDA | 17.77 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates NEE does not grow enough to justify the current Price/Earnings ratio.
NEE has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.7
PEG (5Y)2.06
EPS Next 2Y8.23%
EPS Next 3Y8.55%
5. Dividend
5.1 Amount
NEE has a Yearly Dividend Yield of 3.07%.
NEE's Dividend Yield is slightly below the industry average, which is at 3.63.
NEE's Dividend Yield is a higher than the S&P500 average which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.07% |
5.2 History
On average, the dividend of NEE grows each year by 10.61%, which is quite nice.
NEE has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of NEE decreased in the last 3 years.
Dividend Growth(5Y)10.61%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
78.82% of the earnings are spent on dividend by NEE. This is not a sustainable payout ratio.
The dividend of NEE is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP78.82%
EPS Next 2Y8.23%
EPS Next 3Y8.55%
74.75
+0.87 (+1.18%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners83.13%
Inst Owner Change0%
Ins Owners0.06%
Ins Owner Change6.76%
Market Cap153.88B
Analysts76.15
Price Target82.73 (10.68%)
Short Float %1.7%
Short Ratio2.68
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.07% |
Yearly Dividend2.06
Dividend Growth(5Y)10.61%
DP78.82%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.51%
Min EPS beat(2)-0.12%
Max EPS beat(2)1.14%
EPS beat(4)2
Avg EPS beat(4)0.43%
Min EPS beat(4)-2.94%
Max EPS beat(4)3.63%
EPS beat(8)6
Avg EPS beat(8)4.46%
EPS beat(12)10
Avg EPS beat(12)5.71%
EPS beat(16)14
Avg EPS beat(16)4.92%
Revenue beat(2)0
Avg Revenue beat(2)-16.64%
Min Revenue beat(2)-24.58%
Max Revenue beat(2)-8.71%
Revenue beat(4)0
Avg Revenue beat(4)-14.81%
Min Revenue beat(4)-24.58%
Max Revenue beat(4)-7.56%
Revenue beat(8)3
Avg Revenue beat(8)-3.81%
Revenue beat(12)5
Avg Revenue beat(12)-0.14%
Revenue beat(16)5
Avg Revenue beat(16)-6.8%
PT rev (1m)-1.59%
PT rev (3m)-4.2%
EPS NQ rev (1m)1.6%
EPS NQ rev (3m)-4.92%
EPS NY rev (1m)-0.21%
EPS NY rev (3m)-0.42%
Revenue NQ rev (1m)0.82%
Revenue NQ rev (3m)-1.54%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.3 | ||
| Fwd PE | 18.61 | ||
| P/S | 6.09 | ||
| P/FCF | 34.93 | ||
| P/OCF | 11.88 | ||
| P/B | 3.09 | ||
| P/tB | 3.42 | ||
| EV/EBITDA | 17.77 |
EPS(TTM)3.51
EY4.7%
EPS(NY)4.02
Fwd EY5.37%
FCF(TTM)2.14
FCFY2.86%
OCF(TTM)6.29
OCFY8.42%
SpS12.27
BVpS24.2
TBVpS21.83
PEG (NY)2.7
PEG (5Y)2.06
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.84% | ||
| ROE | 11.06% | ||
| ROCE | 4.31% | ||
| ROIC | 3.84% | ||
| ROICexc | 3.9% | ||
| ROICexgc | 4.01% | ||
| OM | 29.26% | ||
| PM (TTM) | 21.81% | ||
| GM | N/A | ||
| FCFM | 17.43% |
ROA(3y)3.46%
ROA(5y)3.04%
ROE(3y)13.28%
ROE(5y)11.49%
ROIC(3y)3.99%
ROIC(5y)3.56%
ROICexc(3y)4.05%
ROICexc(5y)3.6%
ROICexgc(3y)4.27%
ROICexgc(5y)3.79%
ROCE(3y)4.53%
ROCE(5y)4.03%
ROICexcg growth 3Y23.72%
ROICexcg growth 5Y-1.72%
ROICexc growth 3Y23.46%
ROICexc growth 5Y-1.95%
OM growth 3Y19.72%
OM growth 5Y1.81%
PM growth 3Y10.26%
PM growth 5Y7.41%
GM growth 3YN/A
GM growth 5YN/A
F-Score4
Asset Turnover0.13
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.65 | ||
| Debt/FCF | 20.36 | ||
| Debt/EBITDA | 6.15 | ||
| Cap/Depr | 143.67% | ||
| Cap/Sales | 33.83% | ||
| Interest Coverage | 2.59 | ||
| Cash Conversion | 97.08% | ||
| Profit Quality | 79.95% | ||
| Current Ratio | 0.55 | ||
| Quick Ratio | 0.45 | ||
| Altman-Z | 1.06 |
F-Score4
WACC7.04%
ROIC/WACC0.55
Cap/Depr(3y)168.8%
Cap/Depr(5y)166%
Cap/Sales(3y)38.28%
Cap/Sales(5y)38.73%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)8%
EPS 3Y10.53%
EPS 5Y10.36%
EPS Q2Q%8.79%
EPS Next Y7.9%
EPS Next 2Y8.23%
EPS Next 3Y8.55%
EPS Next 5Y8.33%
Revenue 1Y (TTM)-6.86%
Revenue growth 3Y13.19%
Revenue growth 5Y5.21%
Sales Q2Q%9%
Revenue Next Year4.17%
Revenue Next 2Y6.71%
Revenue Next 3Y7.44%
Revenue Next 5Y7.28%
EBIT growth 1Y-16.4%
EBIT growth 3Y35.51%
EBIT growth 5Y7.12%
EBIT Next Year71.24%
EBIT Next 3Y29.96%
EBIT Next 5Y20.93%
FCF growth 1Y349.86%
FCF growth 3Y111.03%
FCF growth 5Y16.17%
OCF growth 1Y62.45%
OCF growth 3Y20.64%
OCF growth 5Y10.21%