NEXTERA ENERGY INC (NEE)

US65339F1012 - Common Stock

70.43  -0.81 (-1.14%)

After market: 70.5 +0.07 (+0.1%)

Fundamental Rating

4

We assign a fundamental rating of 4 out of 10 to NEE. NEE was compared to 46 industry peers in the Electric Utilities industry. NEE has an excellent profitability rating, but there are concerns on its financial health. NEE is quite expensive at the moment. It does show a decent growth rate.



7

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's Return On Assets of 3.74% is fine compared to the rest of the industry. NEE outperforms 78.38% of its industry peers.
With a decent Return On Equity value of 13.89%, NEE is doing good in the industry, outperforming 75.68% of the companies in the same industry.
NEE's Return On Invested Capital of 4.38% is fine compared to the rest of the industry. NEE outperforms 72.97% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NEE is in line with the industry average of 4.61%.
The 3 year average ROIC (3.21%) for NEE is below the current ROIC(4.38%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 3.74%
ROE 13.89%
ROIC 4.38%
ROA(3y)3.09%
ROA(5y)2.95%
ROE(3y)11.86%
ROE(5y)10.75%
ROIC(3y)3.21%
ROIC(5y)3.45%

1.3 Margins

Looking at the Profit Margin, with a value of 26.49%, NEE belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Profit Margin of NEE has declined.
NEE has a Operating Margin of 32.34%. This is amongst the best in the industry. NEE outperforms 100.00% of its industry peers.
NEE's Operating Margin has improved in the last couple of years.
Industry RankSector Rank
OM 32.34%
PM (TTM) 26.49%
GM N/A
OM growth 3Y9.74%
OM growth 5Y6.62%
PM growth 3Y17.04%
PM growth 5Y-8.11%
GM growth 3YN/A
GM growth 5YN/A

2

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), NEE is destroying value.
Compared to 1 year ago, NEE has more shares outstanding
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 1.07, we must say that NEE is in the distress zone and has some risk of bankruptcy.
NEE has a better Altman-Z score (1.07) than 70.27% of its industry peers.
NEE has a debt to FCF ratio of 15.35. This is a negative value and a sign of low solvency as NEE would need 15.35 years to pay back of all of its debts.
The Debt to FCF ratio of NEE (15.35) is better than 86.49% of its industry peers.
NEE has a Debt/Equity ratio of 1.50. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.50, NEE is in line with its industry, outperforming 48.65% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 1.5
Debt/FCF 15.35
Altman-Z 1.07
ROIC/WACC0.6
WACC7.25%

2.3 Liquidity

A Current Ratio of 0.41 indicates that NEE may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.41, NEE is doing worse than 91.89% of the companies in the same industry.
A Quick Ratio of 0.33 indicates that NEE may have some problems paying its short term obligations.
NEE has a Quick ratio of 0.33. This is amonst the worse of the industry: NEE underperforms 86.49% of its industry peers.
Industry RankSector Rank
Current Ratio 0.41
Quick Ratio 0.33

4

3. Growth

3.1 Past

NEE shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.89%.
NEE shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.50% yearly.
The Revenue has decreased by -4.22% in the past year.
Measured over the past years, NEE shows a quite strong growth in Revenue. The Revenue has been growing by 10.94% on average per year.
EPS 1Y (TTM)7.89%
EPS 3Y11.2%
EPS 5Y10.5%
EPS Q2Q%9.57%
Revenue 1Y (TTM)-4.22%
Revenue growth 3Y16.03%
Revenue growth 5Y10.94%
Sales Q2Q%5.51%

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 8.61% on average per year.
Based on estimates for the next years, NEE will show a small growth in Revenue. The Revenue will grow by 7.17% on average per year.
EPS Next Y8.58%
EPS Next 2Y8.17%
EPS Next 3Y8.28%
EPS Next 5Y8.61%
Revenue Next Year1.86%
Revenue Next 2Y5.74%
Revenue Next 3Y6.33%
Revenue Next 5Y7.17%

3.3 Evolution

The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

3

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 20.59, which indicates a rather expensive current valuation of NEE.
Compared to the rest of the industry, the Price/Earnings ratio of NEE indicates a slightly more expensive valuation: NEE is more expensive than 75.68% of the companies listed in the same industry.
NEE is valuated rather cheaply when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 18.93, which indicates a rather expensive current valuation of NEE.
NEE's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. NEE is more expensive than 72.97% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of NEE to the average of the S&P500 Index (23.54), we can say NEE is valued inline with the index average.
Industry RankSector Rank
PE 20.59
Fwd PE 18.93

4.2 Price Multiples

NEE's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. NEE is more expensive than 78.38% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, NEE is valued cheaper than 86.49% of the companies in the same industry.
Industry RankSector Rank
P/FCF 26.87
EV/EBITDA 15.19

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of NEE may justify a higher PE ratio.
PEG (NY)2.4
PEG (5Y)1.96
EPS Next 2Y8.17%
EPS Next 3Y8.28%

4

5. Dividend

5.1 Amount

NEE has a Yearly Dividend Yield of 2.88%.
Compared to an average industry Dividend Yield of 3.62, NEE is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.33, NEE pays a bit more dividend than the S&P500 average.
Industry RankSector Rank
Dividend Yield 2.88%

5.2 History

On average, the dividend of NEE grows each year by 11.09%, 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)11.09%
Div Incr Years2
Div Non Decr Years2

5.3 Sustainability

NEE pays out 59.48% of its income as dividend. This is a bit on the high side, but may be sustainable.
NEE's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP59.48%
EPS Next 2Y8.17%
EPS Next 3Y8.28%

NEXTERA ENERGY INC

NYSE:NEE (1/7/2025, 8:04:00 PM)

After market: 70.5 +0.07 (+0.1%)

70.43

-0.81 (-1.14%)

Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)10-23 2024-10-23/bmo
Earnings (Next)01-24 2025-01-24/amc
Inst Owners83.18%
Inst Owner Change0%
Ins Owners0.06%
Ins Owner Change-0.08%
Market Cap144.83B
Analysts77.14
Price Target89.62 (27.25%)
Short Float %1.72%
Short Ratio3.33
Dividend
Industry RankSector Rank
Dividend Yield 2.88%
Dividend Growth(5Y)11.09%
DP59.48%
Div Incr Years2
Div Non Decr Years2
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.34%
Min EPS beat(2)-2.94%
Max EPS beat(2)3.63%
EPS beat(4)3
Avg EPS beat(4)5.51%
Min EPS beat(4)-2.94%
Max EPS beat(4)15.94%
EPS beat(8)7
Avg EPS beat(8)6.61%
EPS beat(12)11
Avg EPS beat(12)6.07%
EPS beat(16)15
Avg EPS beat(16)6.12%
Revenue beat(2)0
Avg Revenue beat(2)-12.98%
Min Revenue beat(2)-18.41%
Max Revenue beat(2)-7.56%
Revenue beat(4)1
Avg Revenue beat(4)-3.56%
Min Revenue beat(4)-18.41%
Max Revenue beat(4)19.5%
Revenue beat(8)4
Avg Revenue beat(8)2.11%
Revenue beat(12)5
Avg Revenue beat(12)-2.79%
Revenue beat(16)5
Avg Revenue beat(16)-7.6%
PT rev (1m)-0.44%
PT rev (3m)4.8%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.29%
EPS NY rev (1m)0.05%
EPS NY rev (3m)0.44%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.95%
Revenue NY rev (1m)-0.85%
Revenue NY rev (3m)-2%
Valuation
Industry RankSector Rank
PE 20.59
Fwd PE 18.93
P/S 5.52
P/FCF 26.87
P/OCF 10.23
P/B 2.89
P/tB 3.21
EV/EBITDA 15.19
EPS(TTM)3.42
EY4.86%
EPS(NY)3.72
Fwd EY5.28%
FCF(TTM)2.62
FCFY3.72%
OCF(TTM)6.88
OCFY9.77%
SpS12.76
BVpS24.34
TBVpS21.95
PEG (NY)2.4
PEG (5Y)1.96
Profitability
Industry RankSector Rank
ROA 3.74%
ROE 13.89%
ROCE 5.43%
ROIC 4.38%
ROICexc 4.44%
ROICexgc 4.58%
OM 32.34%
PM (TTM) 26.49%
GM N/A
FCFM 20.54%
ROA(3y)3.09%
ROA(5y)2.95%
ROE(3y)11.86%
ROE(5y)10.75%
ROIC(3y)3.21%
ROIC(5y)3.45%
ROICexc(3y)3.26%
ROICexc(5y)3.49%
ROICexgc(3y)3.43%
ROICexgc(5y)3.66%
ROCE(3y)3.86%
ROCE(5y)4.14%
ROICexcg growth 3Y16.16%
ROICexcg growth 5Y8.67%
ROICexc growth 3Y15.42%
ROICexc growth 5Y7.42%
OM growth 3Y9.74%
OM growth 5Y6.62%
PM growth 3Y17.04%
PM growth 5Y-8.11%
GM growth 3YN/A
GM growth 5YN/A
F-Score3
Asset Turnover0.14
Health
Industry RankSector Rank
Debt/Equity 1.5
Debt/FCF 15.35
Debt/EBITDA 5.24
Cap/Depr 149.59%
Cap/Sales 33.4%
Interest Coverage 3.28
Cash Conversion 98.68%
Profit Quality 77.55%
Current Ratio 0.41
Quick Ratio 0.33
Altman-Z 1.07
F-Score3
WACC7.25%
ROIC/WACC0.6
Cap/Depr(3y)175.29%
Cap/Depr(5y)162.85%
Cap/Sales(3y)40.58%
Cap/Sales(5y)38%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)7.89%
EPS 3Y11.2%
EPS 5Y10.5%
EPS Q2Q%9.57%
EPS Next Y8.58%
EPS Next 2Y8.17%
EPS Next 3Y8.28%
EPS Next 5Y8.61%
Revenue 1Y (TTM)-4.22%
Revenue growth 3Y16.03%
Revenue growth 5Y10.94%
Sales Q2Q%5.51%
Revenue Next Year1.86%
Revenue Next 2Y5.74%
Revenue Next 3Y6.33%
Revenue Next 5Y7.17%
EBIT growth 1Y-8.6%
EBIT growth 3Y27.33%
EBIT growth 5Y18.29%
EBIT Next Year83.65%
EBIT Next 3Y31.56%
EBIT Next 5Y21.11%
FCF growth 1Y1589.23%
FCF growth 3Y12.35%
FCF growth 5Y24.63%
OCF growth 1Y64.92%
OCF growth 3Y12.28%
OCF growth 5Y11.38%