NEXTERA ENERGY INC (NEE) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NEE - US65339F1012 - Common Stock
85.47 USD
+0.66 (+0.78%)
85.62 USD
+0.15 (+0.18%)
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. While NEE is still in line with the averages on profitability rating, there are concerns on its financial health. While showing a medium growth rate, NEE is valued expensive at the moment.
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.
- Each year in the past 5 years NEE has been profitable.
- Each year in the past 5 years NEE had a positive operating cash flow.
1.2 Ratios
- NEE has a better Return On Assets (3.18%) than 67.39% of its industry peers.
- NEE's Return On Equity of 12.00% is fine compared to the rest of the industry. NEE outperforms 63.04% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 3.58%, NEE is doing worse than 67.39% of the companies in the same industry.
- 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
- Looking at the Profit Margin, with a value of 24.72%, NEE belongs to the top of the industry, outperforming 97.83% of the companies in the same industry.
- In the last couple of years the Profit Margin of NEE has grown nicely.
- NEE has a better Operating Margin (28.15%) than 95.65% 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 | 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.
- The number of shares outstanding for NEE has been increased compared to 1 year ago.
- Compared to 5 years ago, NEE has more shares outstanding
- Compared to 1 year ago, NEE has a worse debt to assets ratio.
2.2 Solvency
- Based on the Altman-Z score of 1.13, we must say that NEE is in the distress zone and has some risk of bankruptcy.
- NEE's Altman-Z score of 1.13 is fine compared to the rest 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.
- NEE has a better Debt to FCF ratio (30.30) than 80.43% of its industry peers.
- NEE has a Debt/Equity ratio of 1.65. This is a high value indicating a heavy dependency on external financing.
- The Debt to Equity ratio of NEE (1.65) is worse than 60.87% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.65 | ||
| Debt/FCF | 30.3 | ||
| Altman-Z | 1.13 |
ROIC/WACC0.5
WACC7.14%
2.3 Liquidity
- NEE has a Current Ratio of 0.55. This is a bad value and indicates that NEE is not financially healthy enough and could expect problems in meeting its short term obligations.
- The Current ratio of NEE (0.55) is worse than 86.96% of its industry peers.
- 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.
- 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 been growing slightly by 0.20% in the past year.
- Measured over the past years, NEE shows a small growth in Revenue. The Revenue has been growing by 5.21% on average per year.
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
- Based on estimates for the next years, NEE will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.28% on average per year.
- NEE is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.54% yearly.
EPS Next Y8.55%
EPS Next 2Y8.45%
EPS Next 3Y8.66%
EPS Next 5Y8.28%
Revenue Next Year5.8%
Revenue Next 2Y7.95%
Revenue Next 3Y7.89%
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
- Based on the Price/Earnings ratio of 23.10, the valuation of NEE can be described as rather expensive.
- 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.
- The average S&P500 Price/Earnings ratio is at 27.21. NEE is around the same levels.
- Based on the Price/Forward Earnings ratio of 21.19, the valuation of NEE can be described as rather expensive.
- Based on the Price/Forward Earnings ratio, NEE is valued a bit more expensive than 78.26% of the companies in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.98, NEE is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.1 | ||
| Fwd PE | 21.19 |
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.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of NEE indicates a somewhat cheap valuation: NEE is cheaper than 78.26% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 57.92 | ||
| EV/EBITDA | 18.43 |
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.
- The decent profitability rating of NEE may justify a higher PE ratio.
PEG (NY)2.7
PEG (5Y)2.23
EPS Next 2Y8.45%
EPS Next 3Y8.66%
5. Dividend
5.1 Amount
- NEE has a Yearly Dividend Yield of 2.66%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 2.90, NEE is paying slightly less dividend.
- NEE's Dividend Yield is a higher than the S&P500 average which is at 1.81.
| 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.
- NEE has decreased its dividend 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.
- NEE's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP70.1%
EPS Next 2Y8.45%
EPS Next 3Y8.66%
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 8.55% in the next year.