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. NEE has a medium profitability rating, but doesn't score so well on its financial health evaluation. 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.
Each year in the past 5 years NEE had a positive operating cash flow.
1.2 Ratios
NEE's Return On Assets of 2.84% is in line compared to the rest of the industry. NEE outperforms 46.81% of its industry peers.
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.
The Return On Invested Capital of NEE (3.84%) is worse than 63.83% 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 | 2.84% | ||
| 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.
NEE's Profit Margin has improved in the last couple of years.
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.
In the last couple of years the Operating Margin of NEE has grown nicely.
| 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.
The number of shares outstanding for NEE has been increased compared to 1 year ago.
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 1.07, we must say that NEE is in the distress zone and has some risk of bankruptcy.
NEE has a better Altman-Z score (1.07) than 63.83% of its industry peers.
The Debt to FCF ratio of NEE is 20.36, which is on the high side as it means it would take NEE, 20.36 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of NEE (20.36) is better than 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.
NEE has a Debt to Equity ratio of 1.65. This is in the lower half of the industry: NEE underperforms 63.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.65 | ||
| Debt/FCF | 20.36 | ||
| Altman-Z | 1.07 |
ROIC/WACC0.54
WACC7.09%
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.
NEE's Current ratio of 0.55 is on the low side compared to the rest of the industry. NEE is outperformed by 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.
Looking at the Quick ratio, with a value of 0.45, NEE is doing worse than 80.85% of the companies in the same industry.
| 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.
The Revenue has decreased by -6.86% in the past year.
The Revenue has been growing slightly by 5.21% on average over the past years.
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.
NEE is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.28% yearly.
EPS Next Y7.88%
EPS Next 2Y8.2%
EPS Next 3Y8.6%
EPS Next 5Y8.33%
Revenue Next Year4.89%
Revenue Next 2Y7.13%
Revenue Next 3Y7.62%
Revenue Next 5Y7.28%
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.
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
The Price/Earnings ratio is 21.28, which indicates a rather expensive current valuation of NEE.
76.60% of the companies in the same industry are cheaper than NEE, based on the Price/Earnings ratio.
NEE's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.18.
The Price/Forward Earnings ratio is 18.60, which indicates a rather expensive current valuation of NEE.
Based on the Price/Forward Earnings ratio, NEE is valued a bit more expensive than 74.47% of the companies in the same industry.
NEE's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 35.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.28 | ||
| Fwd PE | 18.6 |
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.
NEE's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. NEE is cheaper than 78.72% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.91 | ||
| EV/EBITDA | 17.9 |
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)2.7
PEG (5Y)2.05
EPS Next 2Y8.2%
EPS Next 3Y8.6%
5. Dividend
5.1 Amount
NEE has a Yearly Dividend Yield of 3.04%. Purely for dividend investing, there may be better candidates out there.
NEE's Dividend Yield is slightly below the industry average, which is at 3.64.
NEE's Dividend Yield is a higher than the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.04% |
5.2 History
On average, the dividend of NEE grows each year by 10.61%, which is quite nice.
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)10.61%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
78.82% of the earnings are spent on dividend by NEE. 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 2Y8.2%
EPS Next 3Y8.6%
74.7
-0.34 (-0.45%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners83.13%
Inst Owner Change0%
Ins Owners0.06%
Ins Owner Change6.76%
Market Cap153.78B
Analysts76.15
Price Target82.73 (10.75%)
Short Float %1.71%
Short Ratio2.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.04% |
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)-0.06%
PT rev (3m)-4.2%
EPS NQ rev (1m)1.24%
EPS NQ rev (3m)-5.12%
EPS NY rev (1m)-0.23%
EPS NY rev (3m)-0.44%
Revenue NQ rev (1m)0.46%
Revenue NQ rev (3m)-1.75%
Revenue NY rev (1m)0.69%
Revenue NY rev (3m)-2.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.28 | ||
| Fwd PE | 18.6 | ||
| P/S | 6.09 | ||
| P/FCF | 34.91 | ||
| P/OCF | 11.87 | ||
| P/B | 3.09 | ||
| P/tB | 3.42 | ||
| EV/EBITDA | 17.9 |
EPS(TTM)3.51
EY4.7%
EPS(NY)4.02
Fwd EY5.38%
FCF(TTM)2.14
FCFY2.86%
OCF(TTM)6.29
OCFY8.42%
SpS12.27
BVpS24.2
TBVpS21.83
PEG (NY)2.7
PEG (5Y)2.05
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 | 1.07 |
F-Score4
WACC7.09%
ROIC/WACC0.54
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 Y7.88%
EPS Next 2Y8.2%
EPS Next 3Y8.6%
EPS Next 5Y8.33%
Revenue 1Y (TTM)-6.86%
Revenue growth 3Y13.19%
Revenue growth 5Y5.21%
Sales Q2Q%9%
Revenue Next Year4.89%
Revenue Next 2Y7.13%
Revenue Next 3Y7.62%
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%