NextEra Energy Partners (NYSE:NEP) - Share price, News & Analysis

Q: What is the Fair Price of NEP when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

NEP ($76.53) is trading below our estimate of [[fair value]] ($259.49)

NEP fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	4/6
Past Performance	2/6
Financial Health	2/6
Dividends	1/6

NEP Stock Overview

NextEra Energy Partners, LP acquires, owns, and manages contracted clean energy projects in the United States.

Rewards

Trading at 70.5% below our estimate of its fair value

Earnings are forecast to grow 26.16% per year

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 3.83% is not well covered by earnings or forecast to be in the next 3 years

Profit margins (7.8%) are lower than last year (38.8%)

Shareholders have been diluted in the past year

NextEra Energy Partners Competitors

Ormat Technologies

NYSE:ORA

US$4.2b

Montauk Renewables

NasdaqCM:MNTK

US$1.6b

Altus Power

NYSE:AMPS

US$1.1b

Clearway Energy

NYSE:CWEN.A

US$6.8b

Price History & Performance

Summary of all time highs, changes and price drops for NextEra Energy Partners
Historical stock prices
Current Share Price	US$76.53
52 Week High	US$88.80
52 Week Low	US$61.31
Beta	0.92
1 Month Change	5.97%
3 Month Change	-6.97%
1 Year Change	2.70%
3 Year Change	59.11%
5 Year Change	106.73%
Change since IPO	139.16%

Recent News & Updates

May 06

NextEra Energy Partners Is A Buy; Don't Worry About The Tariff Investigations

At the end of March, the U.S. Department of Commerce announced it was opening an investigation into anti-dumping circumvention related to solar cells from Southeast Asia. Solar and renewable energy stocks have fallen between 10% and 20% on the back of the announcement, outpacing the S&P 500's 8.5% decline. NextEra Energy Partners has been hit particularly hard, down over 20% since the announcement. We’ve been buying shares below $70. The stock now yields 4.5% and management has reiterated its confidence that the distribution can grow 12% to 15% for at least the next 2.5 years.

Shareholder Returns

	NEP	US Renewable Energy	US Market
7D	10.2%	4.3%	6.3%
1Y	2.7%	-8.6%	-18.8%

Return vs Industry: NEP exceeded the US Renewable Energy industry which returned -7.9% over the past year.

Return vs Market: NEP exceeded the US Market which returned -18.4% over the past year.

Price Volatility

Is NEP's price volatile compared to industry and market?
NEP volatility
NEP Average Weekly Movement	5.3%
Renewable Energy Industry Average Movement	11.2%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.7%
10% least volatile stocks in US Market	3.2%

Stable Share Price: NEP is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: NEP's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2014	n/a	John Ketchum	https://www.investor.nexteraenergypartners.com

NextEra Energy Partners, LP acquires, owns, and manages contracted clean energy projects in the United States. It owns a portfolio of contracted renewable generation assets consisting of wind and solar projects, as well as contracted natural gas pipeline assets. NextEra Energy Partners, LP was incorporated in 2014 and is headquartered in Juno Beach, Florida.

NextEra Energy Partners Fundamentals Summary

How do NextEra Energy Partners's earnings and revenue compare to its market cap?
NEP fundamental statistics
Market Cap	US$6.42b
Earnings (TTM)	US$79.00m
Revenue (TTM)	US$1.02b

81.3x

P/E Ratio

6.3x

P/S Ratio

Is NEP overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
NEP income statement (TTM)
Revenue	US$1.02b
Cost of Revenue	US$441.00m
Gross Profit	US$576.00m
Other Expenses	US$497.00m
Earnings	US$79.00m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.94
Gross Margin	56.64%
Net Profit Margin	7.77%
Debt/Equity Ratio	50.9%

How did NEP perform over the long term?

See historical performance and comparison

Dividends

3.8%

Current Dividend Yield

279%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is NEP undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NEP?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for NEP. This is calculated by dividing NEP's market cap by their current preferred multiple.
What is NEP's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$6.42b

NEP key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	20x
Enterprise Value/EBITDA	31x
PEG Ratio	3.1x

Price to Earnings Ratio vs Peers

How does NEP's PE Ratio compare to its peers?

NEP PE Ratio vs Peers

The above table shows the PE ratio for NEP vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	125.9x
ORA Ormat Technologies	63.7x	20.2%	US$4.2b
MNTK Montauk Renewables	184.1x	38.7%	US$1.6b
AMPS Altus Power	17x	-41.9%	US$1.1b
CWEN.A Clearway Energy	238.8x	22.1%	US$6.8b
NEP NextEra Energy Partners	81.3x	26.2%	US$6.4b

Forward PE

Price-To-Earnings vs Peers: NEP is good value based on its Price-To-Earnings Ratio (81.3x) compared to the peer average (125.9x).

Price to Earnings Ratio vs Industry

How does NEP's PE Ratio compare vs other companies in the Global Renewable Energy Industry?

Price-To-Earnings vs Industry: NEP is expensive based on its Price-To-Earnings Ratio (81.3x) compared to the US Renewable Energy industry average (61.8x)

Price to Earnings Ratio vs Fair Ratio

What is NEP's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NEP PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	81.3x
Fair PE Ratio	29.1x

Price-To-Earnings vs Fair Ratio: NEP is expensive based on its Price-To-Earnings Ratio (81.3x) compared to the estimated Fair Price-To-Earnings Ratio (29.1x).

Share Price vs Fair Value

What is the Fair Price of NEP when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NEP ($76.53) is trading below our estimate of fair value ($259.49)

Significantly Below Fair Value: NEP is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: NEP is poor value based on its PEG Ratio (3.1x)

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Future Growth

How is NextEra Energy Partners forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

26.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: NEP's forecast earnings growth (26.2% per year) is above the savings rate (1.9%).

Earnings vs Market: NEP's earnings (26.2% per year) are forecast to grow faster than the US market (13.9% per year).

High Growth Earnings: NEP's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: NEP's revenue (19.8% per year) is forecast to grow faster than the US market (8.4% per year).

High Growth Revenue: NEP's revenue (19.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: NEP's Return on Equity is forecast to be low in 3 years time (7.7%).

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Past Performance

How has NextEra Energy Partners performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

10.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NEP has high quality earnings.

Growing Profit Margin: NEP's current net profit margins (7.8%) are lower than last year (38.8%).

Past Earnings Growth Analysis

Earnings Trend: NEP's earnings have grown by 10.5% per year over the past 5 years.

Accelerating Growth: NEP's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: NEP had negative earnings growth (-78.6%) over the past year, making it difficult to compare to the Renewable Energy industry average (-12.6%).

Return on Equity

High ROE: NEP's Return on Equity (1.6%) is considered low.

Discover strong past performing companies

Financial Health

How is NextEra Energy Partners's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: NEP's short term assets ($1.3B) exceed its short term liabilities ($800.0M).

Long Term Liabilities: NEP's short term assets ($1.3B) do not cover its long term liabilities ($6.4B).

Debt to Equity History and Analysis

Debt Level: NEP's net debt to equity ratio (49.4%) is considered high.

Reducing Debt: NEP's debt to equity ratio has reduced from 176.8% to 50.9% over the past 5 years.

Debt Coverage: NEP's debt is not well covered by operating cash flow (12%).

Interest Coverage: NEP's interest payments on its debt are not well covered by EBIT (1.2x coverage).

Balance Sheet

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Dividend

What is NextEra Energy Partners's current dividend yield, its reliability and sustainability?

Dividend Score

1/6

Dividend Score 1/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

3.83%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: NEP's dividend (3.83%) is higher than the bottom 25% of dividend payers in the US market (1.57%).

High Dividend: NEP's dividend (3.83%) is low compared to the top 25% of dividend payers in the US market (4.23%).

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, NEP has been paying a dividend for less than 10 years.

Growing Dividend: NEP's dividend payments have increased, but the company has only paid a dividend for 8 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (279.5%), NEP's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (155.6%), NEP's dividend payments are not well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

3.3yrs

Average management tenure

CEO

John Ketchum (50 yo)

0.25

Tenure

Mr. John W. Ketchum has been the Chairman of NextEra Energy Partners, LP since April 20, 2022. He serves as President, Chief Executive Officer & Director at NextEra Energy, Inc. since March 1, 2022. He ser...

Leadership Team

Experienced Management: NEP's management team is considered experienced (3.3 years average tenure).

Board Members

Experienced Board: NEP's board of directors are considered experienced (4.8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 10.6%.

Data	Last Updated (UTC time)
Company Analysis	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31