NEXTERA ENERGY INC (NEE) Stock Fundamental Analysis
NYSE:NEE - New York Stock Exchange, Inc. - US65339F1012 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to NEE. NEE was compared to 47 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.
In the past year NEE had a positive cash flow from operations.
In the past 5 years NEE has always been profitable.
In the past 5 years NEE always reported a positive cash flow from operatings.
1.2 Ratios
NEE has a Return On Assets (2.84%) which is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 11.06%, NEE is in the better half of the industry, outperforming 65.96% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 3.84%, NEE is doing worse than 63.83% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for NEE is significantly below the industry average of 38.54%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.84% | ||
| ROE | 11.06% | ||
| ROIC | 3.84% |
ROA(3y)3.46%
ROA(5y)3.04%
ROE(3y)13.28%
ROE(5y)11.49%
ROIC(3y)3.99%
ROIC(5y)3.56%
1.3 Margins
NEE has a better Profit Margin (21.81%) than 91.49% 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 29.26%, NEE belongs to the top of the industry, outperforming 93.62% of the companies in the same industry.
NEE's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.26% | ||
| PM (TTM) | 21.81% | ||
| GM | N/A |
OM growth 3Y19.72%
OM growth 5Y1.81%
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.
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 1.06, we must say that NEE is in the distress zone and has some risk of bankruptcy.
NEE's Altman-Z score of 1.06 is fine compared to the rest of the industry. NEE outperforms 63.83% of its industry peers.
NEE has a debt to FCF ratio of 20.36. This is a negative value and a sign of low solvency as NEE would need 20.36 years to pay back of all of its debts.
NEE's Debt to FCF ratio of 20.36 is fine compared to the rest of the industry. NEE outperforms 76.60% 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.
The Debt to Equity ratio of NEE (1.65) is worse than 63.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.65 | ||
| Debt/FCF | 20.36 | ||
| Altman-Z | 1.06 |
ROIC/WACC0.55
WACC7.02%
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 82.98% of its industry peers.
NEE has a Quick 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.
With a Quick ratio value of 0.45, NEE is not doing good in the industry: 80.85% 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
NEE shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 8.00%.
The Earnings Per Share has been growing by 10.36% on average over the past years. This is quite good.
NEE shows a decrease in Revenue. In the last year, the revenue decreased by -6.86%.
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%
EPS 3Y10.53%
EPS 5Y10.36%
EPS Q2Q%8.79%
Revenue 1Y (TTM)-6.86%
Revenue growth 3Y13.19%
Revenue growth 5Y5.21%
Sales Q2Q%9%
3.2 Future
The Earnings Per Share is expected to grow by 8.33% on average over the next years. This is quite good.
The Revenue is expected to grow by 7.28% on average over the next years.
EPS Next Y7.9%
EPS Next 2Y8.23%
EPS Next 3Y8.55%
EPS Next 5Y8.33%
Revenue Next Year4.17%
Revenue Next 2Y6.71%
Revenue Next 3Y7.44%
Revenue Next 5Y7.28%
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.
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
NEE is valuated rather expensively with a Price/Earnings ratio of 21.05.
Based on the Price/Earnings ratio, NEE is valued a bit more expensive than the industry average as 76.60% of the companies are valued more cheaply.
NEE's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.45.
Based on the Price/Forward Earnings ratio of 18.39, 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 72.34% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.90. NEE is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.05 | ||
| Fwd PE | 18.39 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NEE indicates a rather expensive valuation: NEE more expensive than 85.11% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, NEE is valued a bit cheaper than 78.72% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.53 | ||
| EV/EBITDA | 17.77 |
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)2.66
PEG (5Y)2.03
EPS Next 2Y8.23%
EPS Next 3Y8.55%
5. Dividend
5.1 Amount
NEE has a Yearly Dividend Yield of 3.07%. Purely for dividend investing, there may be better candidates out there.
NEE's Dividend Yield is slightly below the industry average, which is at 3.67.
Compared to an average S&P500 Dividend Yield of 2.42, NEE pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.07% |
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
NEE pays out 78.82% 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.
DP78.82%
EPS Next 2Y8.23%
EPS Next 3Y8.55%
73.88
+0.86 (+1.18%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners83.13%
Inst Owner Change1.44%
Ins Owners0.06%
Ins Owner Change6.76%
Market Cap152.09B
Analysts76.15
Price Target82.73 (11.98%)
Short Float %1.7%
Short Ratio2.68
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.07% |
Yearly Dividend2.06
Dividend Growth(5Y)10.61%
DP78.82%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.51%
Min EPS beat(2)-0.12%
Max EPS beat(2)1.14%
EPS beat(4)2
Avg EPS beat(4)0.43%
Min EPS beat(4)-2.94%
Max EPS beat(4)3.63%
EPS beat(8)6
Avg EPS beat(8)4.46%
EPS beat(12)10
Avg EPS beat(12)5.71%
EPS beat(16)14
Avg EPS beat(16)4.92%
Revenue beat(2)0
Avg Revenue beat(2)-16.64%
Min Revenue beat(2)-24.58%
Max Revenue beat(2)-8.71%
Revenue beat(4)0
Avg Revenue beat(4)-14.81%
Min Revenue beat(4)-24.58%
Max Revenue beat(4)-7.56%
Revenue beat(8)3
Avg Revenue beat(8)-3.81%
Revenue beat(12)5
Avg Revenue beat(12)-0.14%
Revenue beat(16)5
Avg Revenue beat(16)-6.8%
PT rev (1m)-1.59%
PT rev (3m)-4.08%
EPS NQ rev (1m)-2.58%
EPS NQ rev (3m)-6.41%
EPS NY rev (1m)-0.21%
EPS NY rev (3m)-0.42%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.35%
Revenue NY rev (1m)1.06%
Revenue NY rev (3m)-3.57%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.05 | ||
| Fwd PE | 18.39 | ||
| P/S | 6.02 | ||
| P/FCF | 34.53 | ||
| P/OCF | 11.74 | ||
| P/B | 3.05 | ||
| P/tB | 3.38 | ||
| EV/EBITDA | 17.77 |
EPS(TTM)3.51
EY4.75%
EPS(NY)4.02
Fwd EY5.44%
FCF(TTM)2.14
FCFY2.9%
OCF(TTM)6.29
OCFY8.52%
SpS12.27
BVpS24.2
TBVpS21.83
PEG (NY)2.66
PEG (5Y)2.03
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.84% | ||
| ROE | 11.06% | ||
| ROCE | 4.31% | ||
| ROIC | 3.84% | ||
| ROICexc | 3.9% | ||
| ROICexgc | 4.01% | ||
| OM | 29.26% | ||
| PM (TTM) | 21.81% | ||
| GM | N/A | ||
| FCFM | 17.43% |
ROA(3y)3.46%
ROA(5y)3.04%
ROE(3y)13.28%
ROE(5y)11.49%
ROIC(3y)3.99%
ROIC(5y)3.56%
ROICexc(3y)4.05%
ROICexc(5y)3.6%
ROICexgc(3y)4.27%
ROICexgc(5y)3.79%
ROCE(3y)4.53%
ROCE(5y)4.03%
ROICexcg growth 3Y23.72%
ROICexcg growth 5Y-1.72%
ROICexc growth 3Y23.46%
ROICexc growth 5Y-1.95%
OM growth 3Y19.72%
OM growth 5Y1.81%
PM growth 3Y10.26%
PM growth 5Y7.41%
GM growth 3YN/A
GM growth 5YN/A
F-Score4
Asset Turnover0.13
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.65 | ||
| Debt/FCF | 20.36 | ||
| Debt/EBITDA | 6.15 | ||
| Cap/Depr | 143.67% | ||
| Cap/Sales | 33.83% | ||
| Interest Coverage | 2.59 | ||
| Cash Conversion | 97.08% | ||
| Profit Quality | 79.95% | ||
| Current Ratio | 0.55 | ||
| Quick Ratio | 0.45 | ||
| Altman-Z | 1.06 |
F-Score4
WACC7.02%
ROIC/WACC0.55
Cap/Depr(3y)168.8%
Cap/Depr(5y)166%
Cap/Sales(3y)38.28%
Cap/Sales(5y)38.73%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)8%
EPS 3Y10.53%
EPS 5Y10.36%
EPS Q2Q%8.79%
EPS Next Y7.9%
EPS Next 2Y8.23%
EPS Next 3Y8.55%
EPS Next 5Y8.33%
Revenue 1Y (TTM)-6.86%
Revenue growth 3Y13.19%
Revenue growth 5Y5.21%
Sales Q2Q%9%
Revenue Next Year4.17%
Revenue Next 2Y6.71%
Revenue Next 3Y7.44%
Revenue Next 5Y7.28%
EBIT growth 1Y-16.4%
EBIT growth 3Y35.51%
EBIT growth 5Y7.12%
EBIT Next Year71.24%
EBIT Next 3Y29.96%
EBIT Next 5Y20.93%
FCF growth 1Y349.86%
FCF growth 3Y111.03%
FCF growth 5Y16.17%
OCF growth 1Y62.45%
OCF growth 3Y20.64%
OCF growth 5Y10.21%