NEXTERA ENERGY INC (NEE) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NEE - US65339F1012 - Common Stock
87.57 USD
+0.42 (+0.48%)
87.53 USD
-0.04 (-0.05%)
Taking everything into account, NEE scores 3 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
- NEE had positive earnings in the past year.
- NEE had a positive operating cash flow in the past year.
- NEE had positive earnings in 4 of the past 5 years.
- NEE had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
- With a decent Return On Assets value of 3.18%, NEE is doing good in the industry, outperforming 67.39% of the companies in the same industry.
- NEE has a better Return On Equity (12.00%) than 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.
- Measured over the past 3 years, the Average Return On Invested Capital for NEE 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
- The Profit Margin of NEE (24.72%) is better than 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
- NEE has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- There is no outstanding debt for NEE. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
- NEE has an Altman-Z score of 1.15. This is a bad value and indicates that NEE is not financially healthy and even has some risk of bankruptcy.
- Looking at the Altman-Z score, with a value of 1.15, NEE is in the better half of the industry, outperforming 73.91% of the companies in the same industry.
- The Debt to FCF ratio of NEE is 30.30, which is on the high side as it means it would take NEE, 30.30 years of fcf income to pay off all of its debts.
- NEE has a Debt to FCF ratio of 30.30. This is amongst the best in the industry. NEE outperforms 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.
- NEE's Debt to Equity ratio of 1.65 is on the low side compared to the rest of the industry. NEE is outperformed by 60.87% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.65 | ||
| Debt/FCF | 30.3 | ||
| Altman-Z | 1.15 |
ROIC/WACC0.5
WACC7.18%
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.
- The Quick ratio of NEE (0.45) is worse than 82.61% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.55 | ||
| Quick Ratio | 0.45 |
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.
- NEE shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.92% yearly.
EPS 1Y (TTM)8.16%
EPS 3Y8.43%
EPS 5Y9.92%
EPS Q2Q%1.89%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%20.71%
3.2 Future
- The Earnings Per Share is expected to grow by 7.97% on average over the next years.
- Based on estimates for the next years, NEE will show a quite strong growth in Revenue. The Revenue will grow by 10.01% on average per year.
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
- 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.
4. Valuation
4.1 Price/Earnings Ratio
- NEE is valuated rather expensively with a Price/Earnings ratio of 23.60.
- 78.26% of the companies in the same industry are cheaper than NEE, based on the Price/Earnings ratio.
- NEE's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.60.
- The Price/Forward Earnings ratio is 21.71, which indicates a rather expensive current valuation of NEE.
- Based on the Price/Forward Earnings ratio, NEE is valued a bit more expensive than 78.26% of the companies in the same industry.
- NEE's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.6 | ||
| Fwd PE | 21.71 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, NEE is valued expensively inside the industry as 80.43% of the companies are valued cheaper.
- NEE's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. NEE is cheaper than 78.26% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 59.35 | ||
| EV/EBITDA | 18.78 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PEG (NY)2.7
PEG (5Y)2.38
EPS Next 2Y8.91%
EPS Next 3Y7.84%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.65%, NEE has a reasonable but not impressive dividend return.
- 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 | 2.65% |
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
- NEE pays out 70.10% 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.
DP70.1%
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 3 / 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 5 / 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.