NEXTERA ENERGY INC (NEE) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NEE - US65339F1012 - Common Stock
88.18 USD
+0.61 (+0.7%)
88.28 USD
+0.1 (+0.11%)
We assign a fundamental rating of 4 out of 10 to NEE. NEE was compared to 46 industry peers in the Electric Utilities industry. While NEE is still in line with the averages on profitability rating, there are concerns on its financial health. NEE is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- NEE had positive earnings in the past year.
- 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
- With a decent Return On Assets value of 3.21%, NEE is doing good in the industry, outperforming 67.39% of the companies in the same industry.
- The Return On Equity of NEE (12.51%) is better than 65.22% of its industry peers.
- The Return On Invested Capital of NEE (3.29%) is worse than 69.57% 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 4.57%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.21% | ||
| ROE | 12.51% | ||
| ROIC | 3.29% |
ROA(3y)3.66%
ROA(5y)3.23%
ROE(3y)13.93%
ROE(5y)12.39%
ROIC(3y)3.9%
ROIC(5y)3.12%
1.3 Margins
- NEE's Profit Margin of 24.93% is amongst the best of the industry. NEE outperforms 97.83% of its industry peers.
- NEE's Profit Margin has improved in the last couple of years.
- NEE's Operating Margin of 29.26% is amongst the best of the industry. NEE outperforms 97.83% of its industry peers.
- 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 | 29.26% | ||
| PM (TTM) | 24.93% | ||
| GM | N/A |
OM growth 3Y19.88%
OM growth 5Y1.26%
PM growth 3Y8.01%
PM growth 5Y8.98%
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.
- Compared to 1 year ago, NEE has more shares outstanding
- NEE has more shares outstanding than it did 5 years ago.
- Compared to 1 year ago, NEE has a worse debt to assets ratio.
2.2 Solvency
- Based on the Altman-Z score of 1.12, we must say that NEE is in the distress zone and has some risk of bankruptcy.
- NEE has a Altman-Z score of 1.12. This is in the better half of the industry: NEE outperforms 71.74% of its industry peers.
- The Debt to FCF ratio of NEE is 29.78, which is on the high side as it means it would take NEE, 29.78 years of fcf income to pay off all of its debts.
- NEE has a Debt to FCF ratio of 29.78. This is amongst the best in the industry. NEE outperforms 82.61% of its industry peers.
- A Debt/Equity ratio of 1.69 is on the high side and indicates that NEE has dependencies on debt financing.
- Looking at the Debt to Equity ratio, with a value of 1.69, NEE is doing worse than 63.04% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.69 | ||
| Debt/FCF | 29.78 | ||
| Altman-Z | 1.12 |
ROIC/WACC0.45
WACC7.28%
2.3 Liquidity
- A Current Ratio of 0.60 indicates that NEE may have some problems paying its short term obligations.
- With a Current ratio value of 0.60, NEE is not doing good in the industry: 86.96% of the companies in the same industry are doing better.
- A Quick Ratio of 0.49 indicates that NEE may have some problems paying its short term obligations.
- NEE has a Quick ratio of 0.49. This is amonst the worse of the industry: NEE underperforms 80.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.6 | ||
| Quick Ratio | 0.49 |
3. Growth
3.1 Past
- NEE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.16%, which is quite good.
- The Earnings Per Share has been growing by 9.92% on average over the past years. This is quite good.
- Looking at the last year, NEE shows a quite strong growth in Revenue. The Revenue has grown by 10.75% in the last year.
- Measured over the past years, NEE shows a quite strong growth in Revenue. The Revenue has been growing by 8.78% on average per year.
EPS 1Y (TTM)8.16%
EPS 3Y8.43%
EPS 5Y9.92%
EPS Q2Q%1.89%
Revenue 1Y (TTM)10.75%
Revenue growth 3Y9.36%
Revenue growth 5Y8.78%
Sales Q2Q%20.71%
3.2 Future
- NEE is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.97% yearly.
- NEE is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.01% yearly.
EPS Next Y8.73%
EPS Next 2Y8.91%
EPS Next 3Y7.84%
EPS Next 5Y7.97%
Revenue Next Year10.15%
Revenue Next 2Y8.96%
Revenue Next 3Y8.93%
Revenue Next 5Y10.01%
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.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 23.77, 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 78.26% of the companies listed in the same industry.
- NEE is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.39, which is the current average of the S&P500 Index.
- NEE is valuated rather expensively with a Price/Forward Earnings ratio of 21.86.
- 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.
- When comparing the Price/Forward Earnings ratio of NEE to the average of the S&P500 Index (25.72), we can say NEE is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.77 | ||
| Fwd PE | 21.86 |
4.2 Price Multiples
- 80.43% of the companies in the same industry are cheaper than NEE, based on the Enterprise Value to EBITDA ratio.
- 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 | 57.19 | ||
| EV/EBITDA | 18.22 |
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)2.4
EPS Next 2Y8.91%
EPS Next 3Y7.84%
5. Dividend
5.1 Amount
- NEE has a Yearly Dividend Yield of 2.60%.
- NEE's Dividend Yield is slightly below the industry average, which is at 2.90.
- 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 | 2.6% |
5.2 History
- The dividend of NEE is nicely growing with an annual growth rate of 10.05%!
- NEE has been paying a dividend for at least 10 years, so it has a reliable track record.
- NEE has decreased its dividend in the last 3 years.
Dividend Growth(5Y)10.05%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
- NEE pays out 68.48% of its income as dividend. 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.
DP68.48%
EPS Next 2Y8.91%
EPS Next 3Y7.84%
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 8.73% in the next year.