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NextEra Energy NYSE:NEE Stock Report

Last Price


Market Cap







18 Aug, 2022


Company Financials +
NEE fundamental analysis
Snowflake Score
Future Growth2/6
Past Performance1/6
Financial Health0/6

NEE Stock Overview

NextEra Energy, Inc., through its subsidiaries, generates, transmits, distributes, and sells electric power to retail and wholesale customers in North America.

NextEra Energy, Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for NextEra Energy
Historical stock prices
Current Share PriceUS$90.24
52 Week HighUS$93.73
52 Week LowUS$67.22
1 Month Change14.33%
3 Month Change26.71%
1 Year Change6.73%
3 Year Change62.87%
5 Year Change141.75%
Change since IPO1,877.86%

Recent News & Updates

Aug 17

NextEra Energy: A Dividend Growth Champion You Will Enjoy

In long-term investing, it's important to incorporate low-volatility dividend growth as it's a good foundation for outperformance. NextEra Energy fits the bill perfectly thanks to its recession-proof business model, focus on renewables, and steady and high earnings growth. The dividend isn't high, but dividend growth is consistent and high. While the valuation isn't extremely cheap, I recommend investors to buy and accumulate NEE shares on weakness. Introduction I've been excited to write this article for a number of reasons. The first reason is that we will be discussing a stock that offers everything I'm looking for in a high-quality dividend growth stock. NextEra Energy (NEE) offers a decent yield, high dividend growth, low volatility, and outperformance. All of it is backed by a strong fundamental business. The second reason is that because of these qualities, it's a perfect stock for a wide range of investors including myself as NEE combines upside growth potential and limited downside. So, let's get to it! Why Low Volatility Dividend Growth Is So Important Let me start this article with a lecture on why low volatility investing is so important. While I own a wide variety of different dividend (growth) stocks, I've increasingly focused on buying low-volatility dividend growth. This is my portfolio: Author Portfolio If you are familiar with my articles, you probably know where this is going. However, it's just too important to not include a theoretical background in this article - especially because NEE is indeed one of the best places to be. The title isn't clickbait. Basically, low volatility generates outperforming returns. Normally, one would think that high volatility gets that job done better because higher risks should lead to higher returns. On a long-term basis, that's not the case. As the chart below shows, the higher the volatility, the lower the compounded return. The performance really starts to drop when volatility exceeds 25%. ROBECO In this case, outperforming returns are caused by downside protection. The table below comes from a 2013 article published in The Journal Of Investment Consulting, Geoffrey Gerber explains why dividend growth is such a good defensive equity strategy. He concludes that: Reduced-volatility equity strategies utilizing dividend growth in the stock selection process are shown to have historically provided a boost to risk-adjusted performance. As the table shows, investment A had the highest return as it turned $1.0 million almost into $4.3 million. This portfolio had a high annual return and a low standard deviation. Even investment C outperformed investment B despite a lower annual average return. The key was lower volatility. The Journal Of Investment Consulting (Raw Data: Twin Capital) In other words, even if a dividend stock does not outperform during (every) bull market, outperformance during bear markets gives investors an edge. In light of this, Nasdaq also looked into this issue finding that: Aside from the 1-year data, the low volatility strategy has had superior risk-adjusted returns on a 3, 5, 10-year, and since inception basis. This shows that low volatility is better at providing long-term capital appreciation compared to high volatility strategies, which makes low volatility a critical investment factor to consider. Nasdaq Moreover, and with regard to dividend growth, it's fair to say that a sample of quality dividend growth stocks is able to beat the market. Going back to 1973, dividend growth stocks beat the (equal weight) market by a mile. Hartford Funds Essentially, a dividend is a stamp of approval. It means a company is doing well and able to let shareholders benefit. In this case, I'm not talking about companies that pay dividends with borrowed money. These "bad apples" are quickly punished by the market and made irrelevant. Companies that are able to grow dividends on a consistent basis prove that they can survive the test of time, letting investors benefit from consistent growth. That's an even bigger stamp of approval. Also, it often helps investors protect income against inflation. That's where the quality aspect comes from, which helps companies to beat the market in tough economic times - that's when most bear markets occur. Needless to say, an anti-cyclical business model makes the probability of low volatility even higher. After all, if a business is not expected to see a decline in sales when economic growth falls, investors will cause the stock to do rather well. So, that's where NextEra comes in. NextEra's (Green) Outperformance With a market cap of $179 billion, Juno Beach, Florida-based NextEra Energy is the largest regulated electric utility in the United States. According to the company: [...] NEE's segments for financial reporting purposes are FPL and NEER. NEECH, a wholly owned subsidiary of NEE, owns and provides funding for NEE's operating subsidiaries, other than FPL and its subsidiaries. NEP, an affiliate of NextEra Energy Resources, acquires, manages and owns contracted clean energy projects with stable, long-term cash flows. NextEra Energy FPL (Florida Power & Light) is the largest vertically integrated electric utility in the United States, measured by MWh sales. Moreover, FPL is considered to be one of the best utility franchises in the United States servicing 5.7 million customer accounts. The utility company aims to keep utility bulls among the lowest in Florida - for residential customers. NextEra Energy Next Era Energy Resources (part of NEET), is the world leader in electricity generated from wind and solar sources. As of December 31, 2021, the electric generation was 28 megawatts. 20GW was provided by wind energy, followed by 4GM of solar, 2GW of nuclear energy, and 2GW from natural gas/oil sources. NextEra Energy In order to achieve the Paris Climate Agreement goals for 2050 (full decarbonization), the US economy will need at least 7 thousand GW of renewables and storage capacity. In 2020, that number was 170 GW. Roughly half of this is expected to come from wind power. Hydrogen is expected to be roughly 10%. NextEra is actively pursuing hydrogen opportunities as it has the infrastructure to produce green hydrogen. NextEra is also aggressively investing in new businesses to expand its clean energy footprint. Last month, the Wall Street Journal reported that a Nebraska-based startup looking to produce hydrogen with natural gas while capturing its emissions is getting funding from major players in the industry: Investors including BlackRock Inc. and NextEra Energy Inc. are putting more than $300 million into Monolith, valuing the company at more than $1 billion. The investment adds to a summer flood of money that is trying to turn hydrogen into a pillar of the energy transition. Needless to say, NextEra is one of the cleanest utilities in North America. In 2005, the company was 37% "cleaner" based on its carbon dioxide emissions. In 2020, the company was 47% cleaner than the average electric power company. During this period, clean electricity generation has grown by 75%. Now, before I continue to talk about the energy transition, let me show you why one of the key reasons why I am writing this article, in the first place. Since 1986, NEE shares have returned 13.8% per year. That beats the S&P 500 by 300 basis points per year. That's a big deal. Even more important, the standard deviation was just 18.4%, barely higher than the S&P 500's standard deviation, despite comparing a single stock to a diversified basket of 500 stocks. Hence, the company scores high on a volatility-adjusted basis as well (Sharpe/Sortino ratios). Portfolio Visualizer In this case, it's important to mention that this outperformance has continued in recent years. Whether it's a 3, 5, or 10-year time horizon, NEE has outperformed the market with subdued volatility. Portfolio Visualizer This outperformance is not just caused by the trend in renewables. It's provided by the way NextEra generates tremendous value for shareholders, despite sky-high investment needs. Ignoring everything the company invested prior to 2019, the company expects to invest more than $60 billion of capital from 2019 through 2022. The chart below shows what that looks like. In 2016/2017, the company did close to $10 billion in annual CapEx, which is a lot by any standard. However, in the years ahead, these numbers are expected to rise to more than $20 billion (per year). As the company is unable to pay this out of pocket, it needs new debt. After all, free cash flow is in deeply negative territory. It needs funding for CapEx and for its dividend. As a result, the company is expected to end up with close to $75 billion in net debt in 2024. That would be an increase from less than $30 billion in 2016. However, the debt ratio is not expected to grow above 5.0x in the years ahead, which is good news. There's more good news as the company is generating value with new debt. Between 2006 and 2021, the company grew earnings per share by 8.4% per year. Please note the PER SHARE part as this incorporates stock dilution as a way to provide funding. The good news is that stock dilution is limited. The company mainly uses debt funding as the number of shares outstanding has increased by just 4.2% between 2017 and 2021. NextEra Energy With that said, the company expects to maintain high EPS growth until at least 2025. This is expected to pave the way for a continuation of its impressive dividend growth history, which I will discuss next. NextEra Energy The NEE Dividend Looking at the NEE dividend scorecard, we see that the grades are great when comparing NEE to its utility peers. The only thing that immediately catches one's eye is the low dividend yield grade. Seeking Alpha First of all, the utility sector is typically a place where people go for high yield. The same goes for sectors like energy or real estate. NEE Dividend Yield data by YCharts Second of all, NEE isn't a high-yielding stock at all. The company currently pays a $0.425 quarterly dividend. That's $1.70 per year per share. This implies a 1.90% dividend yield using the current stock price of close to $90.

Aug 09

Conditions Favor NextEra Energy

NextEra Energy continues to trade at a premium valuation. The company's earnings are inflation-resistant. The Senate passage of the Inflation Reduction Act is a boost for NEE. The Wall Street consensus rating is bullish but suggests little potential for price appreciation. The market-implied outlook (calculated from options prices) continues to be bullish, albeit with fairly high volatility. The Senate's just-passed Inflation Reduction Act of 2022 provides significant incentives for utilities to expand green energy production. NextEra Energy (NEE), the largest producer of solar and wind energy in the world, stands to benefit. The bill also expands incentives for electric cars, increasing demand for electricity. The House of Representatives is expected to vote on the bill as soon as Friday. Along with the boost anticipated from the Inflation Reduction Act, high inflation is also positive for wind and solar energy assets because their cost of production is not impacted by high commodity prices. While NEE has rallied dramatically in the past 3 months, up 21.4%, the trailing 12-month return of 10.6%, lags those from utility index funds (XLU: 13.5%, IDU: 12.3%). Over the past 3-, 5-, 10- and 15-year periods, however, NEE has substantially outperformed. Rising interest rates are a greater concern for NEE than for the average utility because of NEE's richer valuation. NEE has a high forward P/E compared to other utilities, which means that the valuation is more dependent on growth assumptions. Rising interest rates increase the discount factor applied to future earnings, so that the fair value of NEE tends to decline more with rising rates than the average utility. Rising interest rates are also disproportionately costly for NEE because of the company's high variable rate debt load. Seeking Alpha 12-Month price history and basic statistics for NEE (Source: Seeking Alpha) NEE reported Q2 results on July 22nd, beating the consensus estimate for quarterly EPS by 10.4%. Over the past 4 years, NEE has beaten the consensus on EPS in all but 2 quarters. Both of the misses were very small. The consensus outlook for EPS growth is +9.7% per year over the next 3 to 5 years, considerably higher growth than is expected for the utility sector as a whole. This higher expected growth rate is largely priced into the shares, however. Etrade Trailing (4 years) and estimated future quarterly EPS for NEE. Green (red) values are amounts by which EPS beat (missed) the consensus estimated value (Source: ETrade) I last analyzed NEE on April 7th, about 4 months ago, at which time I maintained a buy rating on the shares. At that time, the major considerations were essentially the same as they are today, although the prospects of congress passing significant measures favoring clean energy looked dim. Even though the valuation was concerningly high, NEE appeared generally well-positioned. The Wall Street consensus rating was bullish, although the consensus 12-month price target implied a total return of 8.3%, less than half the annualized rate of return over the past 3-, 5-, and 10-year periods. The consensus view implied by options prices, the market-implied outlook, was bullish into early 2023. Since the publication of this post, NEE has substantially outperformed the broader market. Seeking Alpha Previous analysis of NEE and subsequent performance vs. the S&P 500 (Source: Seeking Alpha) For readers who are unfamiliar with the market-implied outlook, a brief explanation is needed. The price of an option on a stock is largely determined by the market's consensus estimate of the probability that the stock price will rise above (call option) or fall below (put option) a specific level (the option strike price) between now and when the option expires. By analyzing the prices of call and put options at a range of strike prices, all with the same expiration date, it is possible to calculate a probabilistic price forecast that reconciles the options prices. This is the market-implied outlook. For a deeper explanation and background, I recommend this monograph published by the CFA Institute. With the pending congressional vote on the Inflation Reduction Act of 2022, along with the substantial outperformance of NEE over the past 4 months, I am revisiting my position on NEE. I have calculated an updated market-implied outlook to January of 2023 and I have compared this with the current Wall Street consensus outlook, as in my previous analyses. Wall Street Consensus Outlook for NEE ETrade calculates the Wall Street consensus outlook for NEE using ratings and price targets from 11 ranked analysts who have published their views within the past 3 months. The consensus rating is bullish, as it has been for all of the past 12 months, and the consensus 12-month price target is 3.3% above the current share price. When you see a bullish rating with a price target that is not much above the current share price, this typically means that the share price has rallied in recent months, compressing the upside on the stock. This is the case for NEE, although it is also worth noting that the consensus 12-month price target has actually fallen in recent months. In my April analysis, ETrade calculated a 12-month consensus price target of $93.17. Of the 11 analyst views included in the consensus, only 1 has been updated since the Senate passed the Inflation Reduction Act and, as a result, do not reflect the improved outlook for government support of clean energy. ETrade Wall Street analyst consensus rating and 12-month price target for NEE (Source: ETrade) Seeking Alpha's version of the Wall Street consensus outlook is calculated using ratings and price targets from 20 analysts who have published opinions over the past 90 days. The consensus rating is bullish and the consensus 12-month price target is 2.22% above the current share price. Seeking Alpha Wall Street analyst consensus rating and 12-month price target for NEE (Source: Seeking Alpha) While the Wall Street analyst consensus rating continues to be bullish, the 21.4% gain in the shares over the past 3 months has reduced the potential price appreciation. The consensus price target (averaging the values from ETrade and Seeking Alpha) implies a total return of 4.6% over the next year. It is worth remembering, however, that the consensus calculated using analyst views from the past several months will, by definition, not be entirely responsive to the improved prospects for passage of the Inflation Reduction Act of 2022. Market-Implied Outlook for NEE I have calculated the market-implied outlook for NEE for the 5.4-month period from now until January 20, 2023, using the prices of call and put options that expire on this date. I analyzed this specific expiration date to provide a view through the end of 2022 and because these options are especially actively traded, as compared to other expiration dates. In addition, I created the market-implied outlook in April using this expiration date, which makes for an interesting comparison. The standard presentation of the market-implied outlook is a probability distribution of price return, with probability on the vertical axis and return on the horizontal. Geoff Considine Market-implied price return probabilities for NEE for the 5.4-month period from now until January 20, 2023 (Source: Author's calculations using options quotes from ETrade) At first glance, market-implied price return probabilities look quite symmetric, with comparable probabilities of positive and negative returns of the same magnitude. The peak in probability is very slightly tilted to favor negative returns. The expected volatility calculated from this outlook is 29% annualized, which is quite high for a utility. This reflects elevated uncertainties due to the high valuation, interest rates, and the potential upside from increased government support for wind and solar energy. The expected volatility from my April analysis was 27.7%. To make it easier to compare the relative probabilities of positive and negative returns, I rotate the negative return side of the distribution about the vertical axis (see chart below).

Jul 29

NextEra Energy declares $0.425 dividend

NextEra Energy (NYSE:NEE) declares $0.425/share quarterly dividend, in line with previous. Forward yield 2.01% Payable Sept. 15; for shareholders of record Aug. 30; ex-div Aug. 29. See NEE Dividend Scorecard, Yield Chart, & Dividend Growth.

Jul 25
NextEra Energy (NYSE:NEE) Has A Somewhat Strained Balance Sheet

NextEra Energy (NYSE:NEE) Has A Somewhat Strained Balance Sheet

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of...

Shareholder Returns

NEEUS Electric UtilitiesUS Market

Return vs Industry: NEE underperformed the US Electric Utilities industry which returned 8.5% over the past year.

Return vs Market: NEE exceeded the US Market which returned -9% over the past year.

Price Volatility

Is NEE's price volatile compared to industry and market?
NEE volatility
NEE Average Weekly Movement4.2%
Electric Utilities Industry Average Movement3.4%
Market Average Movement7.6%
10% most volatile stocks in US Market17.1%
10% least volatile stocks in US Market3.1%

Stable Share Price: NEE is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: NEE's weekly volatility (4%) has been stable over the past year.

About the Company

192515,000John Ketchum

NextEra Energy, Inc., through its subsidiaries, generates, transmits, distributes, and sells electric power to retail and wholesale customers in North America. The company generates electricity through wind, solar, nuclear, coal, and natural gas facilities. It also develops, constructs, and operates long-term contracted assets that consists of clean energy solutions, such as renewable generation facilities, battery storage projects, and electric transmission facilities; sells energy commodities; and owns, develops, constructs, manages and operates electric generation facilities in wholesale energy markets.

NextEra Energy, Inc. Fundamentals Summary

How do NextEra Energy's earnings and revenue compare to its market cap?
NEE fundamental statistics
Market CapUS$177.22b
Earnings (TTM)US$2.58b
Revenue (TTM)US$17.49b


P/E Ratio


P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
NEE income statement (TTM)
Cost of RevenueUS$9.51b
Gross ProfitUS$7.98b
Other ExpensesUS$5.40b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date


Earnings per share (EPS)1.31
Gross Margin45.63%
Net Profit Margin14.75%
Debt/Equity Ratio142.5%

How did NEE perform over the long term?

See historical performance and comparison



Current Dividend Yield


Payout Ratio

Does NEE pay a reliable dividends?

See NEE dividend history and benchmarks
When do you need to buy NEE by to receive an upcoming dividend?
NextEra Energy dividend dates
Ex Dividend DateAug 29 2022
Dividend Pay DateSep 15 2022
Days until Ex dividend10 days
Days until Dividend pay date27 days

Does NEE pay a reliable dividends?

See NEE dividend history and benchmarks