Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at NextEra Energy Inc’s (NYSE:NEE) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. See our latest analysis for NextEra Energy
Did NEE beat its long-term earnings growth trend and its industry?
For the most up-to-date info, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This allows me to analyze various companies on a similar basis, using the most relevant data points. For NextEra Energy, its latest trailing-twelve-month earnings is $4,189.0M, which compared to the previous year’s level, has moved up by an impressive 70.77%. Given that these figures are somewhat nearsighted, I’ve determined an annualized five-year figure for NEE’s earnings, which stands at $2,384.8M. This means that, on average, NextEra Energy has been able to gradually improve its profits over the past couple of years as well.What’s the driver of this growth? Let’s see whether it is solely because of industry tailwinds, or if NextEra Energy has experienced some company-specific growth. In the last couple of years, NextEra Energy increased its bottom line faster than revenue by effectively controlling its costs. This has led to a margin expansion and profitability over time. Scanning growth from a sector-level, the US electric utilities industry has been growing, albeit, at a muted single-digit rate of 5.63% over the past year, and 3.58% over the previous five years. This means any tailwind the industry is profiting from, NextEra Energy is capable of leveraging this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research NextEra Energy to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for NEE’s future growth? Take a look at our free research report of analyst consensus for NEE’s outlook.
2. Financial Health: Is NEE’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2017. This may not be consistent with full year annual report figures.