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Reasons to Add NextEra Energy (NEE) to Your Portfolio Now
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NextEra Energy Inc. (NEE - Free Report) continues to expand its clean power generation portfolio through strong investment plans and currently has an impressive backlog of renewable projects. Along with organic growth, strategic acquisitions will expand NextEra Energy’s operation and drive its performance in the long run.
The Zacks Consensus Estimate for 2022 earnings has moved up by 0.7% in the past 30 days to $2.79 per share. NEE’s 2022 earnings suggest year-over-year growth of 10.59%.
NextEra Energy’s long-term (three to five years) earnings growth is projected at 8.8%.
NextEra Energy delivered an average earnings surprise of 6.1% in the last four quarters.
Investments & Emission Reduction
NextEra Energy has planned capital deployment of more than $60 billion from 2019 to 2022 in various natural gas-fueled projects. NEE, through its subsidiaries, advocates higher usage of clean fuel sources to generate electricity and aims to reduce total carbon emissions by 67% within 2025 from the 2005 base.
Debt Position
At the end of the fourth quarter of 2021,the Debt to Capital of NextEra Energy was 54.69% compared with the industry average of 56.53%. This indicates that NextEra Energy is comparatively using lower debts to manage the business compared with peers.
At the end of the fourth quarter of 2021, the times interest earned ratio of NEE was 3.5, up from 2.2 at the end of the fourth quarter of 2020. The strong ratio indicates that the company has enough financial strength to meet debt obligations.
Inorganic Growth
NextEra Energy makes strategic acquisitions to expand its operation. The acquisition of Gulf Power Company, Florida City Gas and ownership stakes in two natural gas power plants from Southern Company will further expand the regulated natural gas operation of NextEra Energy and be accretive to its earnings over the long term. The acquisitions of GridLiance Holdco, LP and GridLiance GP, LLC (GridLiance) for nearly $660 million will allow the company to have control over 700 miles of high-voltage transmission lines and related equipment across six states.
Return on Equity
Return on Equity (ROE) indicates how efficiently a company is utilizing shareholders’ funds in the business to generate returns. At present, NEE’s ROE is 11.1%, higher than the industry average of 9.11%, which indicates that the company is utilizing the funds more effectively than industry peers.
Price Performance
In the past month, NextEra Energy stock has rallied 9.2% compared with the industry’s 8.5% growth.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other similar-ranked stocks from the electric power industry include Ameren (AEE - Free Report) , PNM Resources (PNM - Free Report) and WEC Energy Group (WEC - Free Report) .
The long-term earnings growth of Ameren, PNM Resources and WEC Energy Group is projected at 7.2%, 5% and 6%, respectively.
The Zacks Consensus Estimate for 2022 earnings per share of Ameren, PNM Resources and WEC Energy Group has moved up 5.47%, 4.08% and 4.87%, respectively, year over year.
In the past three months, AEE, PNM and WEC shares have rallied 5.8%, 4.9% and 3.8%, respectively.
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Reasons to Add NextEra Energy (NEE) to Your Portfolio Now
NextEra Energy Inc. (NEE - Free Report) continues to expand its clean power generation portfolio through strong investment plans and currently has an impressive backlog of renewable projects. Along with organic growth, strategic acquisitions will expand NextEra Energy’s operation and drive its performance in the long run.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Growth Projection & Earnings Surprise
The Zacks Consensus Estimate for 2022 earnings has moved up by 0.7% in the past 30 days to $2.79 per share. NEE’s 2022 earnings suggest year-over-year growth of 10.59%.
NextEra Energy’s long-term (three to five years) earnings growth is projected at 8.8%.
NextEra Energy delivered an average earnings surprise of 6.1% in the last four quarters.
Investments & Emission Reduction
NextEra Energy has planned capital deployment of more than $60 billion from 2019 to 2022 in various natural gas-fueled projects. NEE, through its subsidiaries, advocates higher usage of clean fuel sources to generate electricity and aims to reduce total carbon emissions by 67% within 2025 from the 2005 base.
Debt Position
At the end of the fourth quarter of 2021,the Debt to Capital of NextEra Energy was 54.69% compared with the industry average of 56.53%. This indicates that NextEra Energy is comparatively using lower debts to manage the business compared with peers.
At the end of the fourth quarter of 2021, the times interest earned ratio of NEE was 3.5, up from 2.2 at the end of the fourth quarter of 2020. The strong ratio indicates that the company has enough financial strength to meet debt obligations.
Inorganic Growth
NextEra Energy makes strategic acquisitions to expand its operation. The acquisition of Gulf Power Company, Florida City Gas and ownership stakes in two natural gas power plants from Southern Company will further expand the regulated natural gas operation of NextEra Energy and be accretive to its earnings over the long term. The acquisitions of GridLiance Holdco, LP and GridLiance GP, LLC (GridLiance) for nearly $660 million will allow the company to have control over 700 miles of high-voltage transmission lines and related equipment across six states.
Return on Equity
Return on Equity (ROE) indicates how efficiently a company is utilizing shareholders’ funds in the business to generate returns. At present, NEE’s ROE is 11.1%, higher than the industry average of 9.11%, which indicates that the company is utilizing the funds more effectively than industry peers.
Price Performance
In the past month, NextEra Energy stock has rallied 9.2% compared with the industry’s 8.5% growth.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other similar-ranked stocks from the electric power industry include Ameren (AEE - Free Report) , PNM Resources (PNM - Free Report) and WEC Energy Group (WEC - Free Report) .
The long-term earnings growth of Ameren, PNM Resources and WEC Energy Group is projected at 7.2%, 5% and 6%, respectively.
The Zacks Consensus Estimate for 2022 earnings per share of Ameren, PNM Resources and WEC Energy Group has moved up 5.47%, 4.08% and 4.87%, respectively, year over year.
In the past three months, AEE, PNM and WEC shares have rallied 5.8%, 4.9% and 3.8%, respectively.