NEXTERA ENERGY INC (NEE) Stock Fundamental Analysis
NYSE:NEE - New York Stock Exchange, Inc. - US65339F1012 - Common Stock - Currency: USD
Taking everything into account, NEE scores 4 out of 10 in our fundamental rating. 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. 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.
In the past 5 years NEE has always been profitable.
NEE had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
NEE has a Return On Assets (2.98%) which is in line with its industry peers.
The Return On Equity of NEE (11.65%) is better than 68.09% of its industry peers.
NEE has a worse Return On Invested Capital (3.82%) than 65.96% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NEE is significantly below the industry average of 38.54%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.98% | ||
| ROE | 11.65% | ||
| ROIC | 3.82% |
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 Profit Margin of 22.84%. This is amongst the best in the industry. NEE outperforms 93.62% of its industry peers.
In the last couple of years the Profit Margin of NEE has grown nicely.
NEE has a better Operating Margin (29.52%) than 93.62% of its industry peers.
NEE's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.52% | ||
| PM (TTM) | 22.84% | ||
| 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
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.
Compared to 5 years ago, NEE has more shares outstanding
The debt/assets ratio for NEE is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.03, we must say that NEE is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of NEE (1.03) is better than 61.70% of its industry peers.
NEE has a debt to FCF ratio of 24.95. This is a negative value and a sign of low solvency as NEE would need 24.95 years to pay back of all of its debts.
NEE has a better Debt to FCF ratio (24.95) than 76.60% of its industry peers.
A Debt/Equity ratio of 1.72 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 1.72, NEE is doing worse than 65.96% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.72 | ||
| Debt/FCF | 24.95 | ||
| Altman-Z | 1.03 |
ROIC/WACC0.55
WACC6.92%
2.3 Liquidity
NEE has a Current Ratio of 0.54. This is a bad value and indicates that NEE is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.54, NEE is doing worse than 87.23% of the companies in the same industry.
A Quick Ratio of 0.45 indicates that NEE may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.45, NEE is doing worse than 78.72% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.54 | ||
| Quick Ratio | 0.45 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 8.11% over the past year.
The Earnings Per Share has been growing by 10.36% on average over the past years. This is quite good.
NEE shows a small growth in Revenue. In the last year, the Revenue has grown by 0.19%.
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)8.11%
EPS 3Y10.53%
EPS 5Y10.36%
EPS Q2Q%9.38%
Revenue 1Y (TTM)0.19%
Revenue growth 3Y13.19%
Revenue growth 5Y5.21%
Sales Q2Q%10.4%
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 Y7.88%
EPS Next 2Y8.2%
EPS Next 3Y8.6%
EPS Next 5Y8.33%
Revenue Next Year3.68%
Revenue Next 2Y6.68%
Revenue Next 3Y7.49%
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
Based on the Price/Earnings ratio of 20.16, the valuation of NEE can be described as rather expensive.
Based on the Price/Earnings ratio, NEE is valued a bit more expensive than the industry average as 65.96% of the companies are valued more cheaply.
When comparing the Price/Earnings ratio of NEE to the average of the S&P500 Index (26.54), we can say NEE is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 18.07, the valuation of NEE can be described as rather expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as NEE.
The average S&P500 Price/Forward Earnings ratio is at 35.28. NEE is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.16 | ||
| Fwd PE | 18.07 |
4.2 Price Multiples
NEE's Enterprise Value to EBITDA ratio is rather expensive when compared to the industry. NEE is more expensive than 80.85% of the companies 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 | 40.02 | ||
| EV/EBITDA | 16.89 |
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)2.56
PEG (5Y)1.95
EPS Next 2Y8.2%
EPS Next 3Y8.6%
5. Dividend
5.1 Amount
NEE has a Yearly Dividend Yield of 3.19%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.64, NEE has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.40, NEE pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
5.2 History
The dividend of NEE is nicely growing with an annual growth rate of 10.61%!
NEE has been paying a dividend for at least 10 years, so it has 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
75.25% 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.
DP75.25%
EPS Next 2Y8.2%
EPS Next 3Y8.6%
72.58
+2.04 (+2.89%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners83.13%
Inst Owner Change-0.38%
Ins Owners0.06%
Ins Owner Change6.56%
Market Cap149.46B
Analysts76.15
Price Target82.29 (13.38%)
Short Float %1.74%
Short Ratio2.93
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
Yearly Dividend2.06
Dividend Growth(5Y)10.61%
DP75.25%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.05%
Min EPS beat(2)1.14%
Max EPS beat(2)2.96%
EPS beat(4)3
Avg EPS beat(4)1.9%
Min EPS beat(4)-0.12%
Max EPS beat(4)3.63%
EPS beat(8)6
Avg EPS beat(8)4.1%
EPS beat(12)10
Avg EPS beat(12)5.18%
EPS beat(16)14
Avg EPS beat(16)5.04%
Revenue beat(2)0
Avg Revenue beat(2)-9.4%
Min Revenue beat(2)-10.09%
Max Revenue beat(2)-8.71%
Revenue beat(4)0
Avg Revenue beat(4)-12.74%
Min Revenue beat(4)-24.58%
Max Revenue beat(4)-7.56%
Revenue beat(8)2
Avg Revenue beat(8)-7.16%
Revenue beat(12)5
Avg Revenue beat(12)-0.92%
Revenue beat(16)5
Avg Revenue beat(16)-6.06%
PT rev (1m)-0.54%
PT rev (3m)-3.34%
EPS NQ rev (1m)-1.58%
EPS NQ rev (3m)-2.8%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)-0.2%
Revenue NQ rev (1m)-1.87%
Revenue NQ rev (3m)-3.35%
Revenue NY rev (1m)-0.47%
Revenue NY rev (3m)-2.83%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.16 | ||
| Fwd PE | 18.07 | ||
| P/S | 5.77 | ||
| P/FCF | 40.02 | ||
| P/OCF | 12.24 | ||
| P/B | 2.94 | ||
| P/tB | 3.25 | ||
| EV/EBITDA | 16.89 |
EPS(TTM)3.6
EY4.96%
EPS(NY)4.02
Fwd EY5.53%
FCF(TTM)1.81
FCFY2.5%
OCF(TTM)5.93
OCFY8.17%
SpS12.58
BVpS24.67
TBVpS22.3
PEG (NY)2.56
PEG (5Y)1.95
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.98% | ||
| ROE | 11.65% | ||
| ROCE | 4.35% | ||
| ROIC | 3.82% | ||
| ROICexc | 3.86% | ||
| ROICexgc | 3.97% | ||
| OM | 29.52% | ||
| PM (TTM) | 22.84% | ||
| GM | N/A | ||
| FCFM | 14.42% |
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 | 1.72 | ||
| Debt/FCF | 24.95 | ||
| Debt/EBITDA | 6.26 | ||
| Cap/Depr | 133.75% | ||
| Cap/Sales | 32.72% | ||
| Interest Coverage | 2.36 | ||
| Cash Conversion | 87.32% | ||
| Profit Quality | 63.13% | ||
| Current Ratio | 0.54 | ||
| Quick Ratio | 0.45 | ||
| Altman-Z | 1.03 |
F-Score4
WACC6.92%
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)8.11%
EPS 3Y10.53%
EPS 5Y10.36%
EPS Q2Q%9.38%
EPS Next Y7.88%
EPS Next 2Y8.2%
EPS Next 3Y8.6%
EPS Next 5Y8.33%
Revenue 1Y (TTM)0.19%
Revenue growth 3Y13.19%
Revenue growth 5Y5.21%
Sales Q2Q%10.4%
Revenue Next Year3.68%
Revenue Next 2Y6.68%
Revenue Next 3Y7.49%
Revenue Next 5Y7.28%
EBIT growth 1Y-0.6%
EBIT growth 3Y35.51%
EBIT growth 5Y7.12%
EBIT Next Year71.24%
EBIT Next 3Y29.96%
EBIT Next 5Y20.93%
FCF growth 1Y309.01%
FCF growth 3Y111.03%
FCF growth 5Y16.17%
OCF growth 1Y48.37%
OCF growth 3Y20.64%
OCF growth 5Y10.21%