NEXTERA ENERGY INC (NEE) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NEE - US65339F1012 - Common Stock
84.81 USD
-0.26 (-0.31%)
84.3 USD
-0.51 (-0.6%)
Taking everything into account, NEE scores 4 out of 10 in our fundamental rating. NEE was compared to 46 industry peers in the Electric Utilities industry. NEE has a medium profitability rating, but doesn't score so well on its financial health evaluation. 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.
- NEE had a positive operating cash flow in the past year.
- 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
- The Return On Assets of NEE (3.18%) is better than 67.39% of its industry peers.
- NEE has a better Return On Equity (12.00%) than 63.04% of its industry peers.
- The Return On Invested Capital of NEE (3.58%) is worse than 67.39% of its industry peers.
- NEE had an Average Return On Invested Capital over the past 3 years of 3.99%. This is in line with the industry average of 4.58%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.18% | ||
| ROE | 12% | ||
| ROIC | 3.58% |
ROA(3y)3.46%
ROA(5y)3.04%
ROE(3y)13.28%
ROE(5y)11.49%
ROIC(3y)3.99%
ROIC(5y)3.59%
1.3 Margins
- NEE's Profit Margin of 24.72% is amongst the best of the industry. NEE outperforms 97.83% of its industry peers.
- In the last couple of years the Profit Margin of NEE has grown nicely.
- Looking at the Operating Margin, with a value of 28.15%, NEE belongs to the top of the industry, outperforming 95.65% of the companies in the same industry.
- In the last couple of years the Operating Margin of NEE has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 28.15% | ||
| PM (TTM) | 24.72% | ||
| GM | N/A |
OM growth 3Y19.72%
OM growth 5Y0.9%
PM growth 3Y10.26%
PM growth 5Y7.41%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), NEE is destroying value.
- NEE has more shares outstanding than it did 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
- NEE has an Altman-Z score of 1.13. This is a bad value and indicates that NEE is not financially healthy and even has some risk of bankruptcy.
- NEE has a Altman-Z score of 1.13. This is in the better half of the industry: NEE outperforms 73.91% of its industry peers.
- NEE has a debt to FCF ratio of 30.30. This is a negative value and a sign of low solvency as NEE would need 30.30 years to pay back of all of its debts.
- The Debt to FCF ratio of NEE (30.30) is better than 80.43% of its industry peers.
- 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: 60.87% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.65 | ||
| Debt/FCF | 30.3 | ||
| Altman-Z | 1.13 |
ROIC/WACC0.5
WACC7.14%
2.3 Liquidity
- A Current Ratio of 0.55 indicates that NEE may have some problems paying its short term obligations.
- With a Current ratio value of 0.55, NEE is not doing good in the industry: 86.96% of the companies in the same industry are doing better.
- A Quick Ratio of 0.45 indicates that NEE may have some problems paying its short term obligations.
- With a Quick ratio value of 0.45, NEE is not doing good in the industry: 82.61% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.55 | ||
| Quick Ratio | 0.45 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 8.19% over the past year.
- Measured over the past years, NEE shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.36% on average per year.
- NEE shows a small growth in Revenue. In the last year, the Revenue has grown by 0.20%.
- NEE shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.21% yearly.
EPS 1Y (TTM)8.19%
EPS 3Y10.53%
EPS 5Y10.36%
EPS Q2Q%9.71%
Revenue 1Y (TTM)0.2%
Revenue growth 3Y13.19%
Revenue growth 5Y5.21%
Sales Q2Q%5.27%
3.2 Future
- The Earnings Per Share is expected to grow by 8.28% on average over the next years. This is quite good.
- The Revenue is expected to grow by 8.54% on average over the next years. This is quite good.
EPS Next Y8.42%
EPS Next 2Y8.57%
EPS Next 3Y8.77%
EPS Next 5Y8.28%
Revenue Next Year4.93%
Revenue Next 2Y7.79%
Revenue Next 3Y7.76%
Revenue Next 5Y8.54%
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 decreasing.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 22.92 indicates a rather expensive valuation of NEE.
- NEE's Price/Earnings ratio is a bit more expensive when compared to the industry. NEE is more expensive than 78.26% of the companies in the same industry.
- When comparing the Price/Earnings ratio of NEE to the average of the S&P500 Index (27.21), we can say NEE is valued inline with the index average.
- The Price/Forward Earnings ratio is 20.98, 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 78.26% of the companies in the same industry.
- NEE is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.92 | ||
| Fwd PE | 20.98 |
4.2 Price Multiples
- NEE's Enterprise Value to EBITDA ratio is rather expensive when compared to the industry. NEE is more expensive than 80.43% of the companies in the same industry.
- 78.26% of the companies in the same industry are more expensive than NEE, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 57.48 | ||
| EV/EBITDA | 18.47 |
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)2.72
PEG (5Y)2.21
EPS Next 2Y8.57%
EPS Next 3Y8.77%
5. Dividend
5.1 Amount
- NEE has a Yearly Dividend Yield of 2.66%.
- Compared to an average industry Dividend Yield of 2.93, NEE is paying slightly less dividend.
- Compared to an average S&P500 Dividend Yield of 1.82, NEE pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.66% |
5.2 History
- The dividend of NEE is nicely growing with an annual growth rate of 10.61%!
- 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
- 70.10% 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.
DP70.1%
EPS Next 2Y8.57%
EPS Next 3Y8.77%
NEXTERA ENERGY INC / NEE FAQ
What is the fundamental rating for NEE stock?
ChartMill assigns a fundamental rating of 4 / 10 to NEE.
Can you provide the valuation status for NEXTERA ENERGY INC?
ChartMill assigns a valuation rating of 2 / 10 to NEXTERA ENERGY INC (NEE). This can be considered as Overvalued.
Can you provide the profitability details for NEXTERA ENERGY INC?
NEXTERA ENERGY INC (NEE) has a profitability rating of 6 / 10.
Can you provide the financial health for NEE stock?
The financial health rating of NEXTERA ENERGY INC (NEE) is 2 / 10.
What is the expected EPS growth for NEXTERA ENERGY INC (NEE) stock?
The Earnings per Share (EPS) of NEXTERA ENERGY INC (NEE) is expected to grow by 8.42% in the next year.