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NextEra Energy Partners to Sell Canadian Assets for $582M
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NextEra Energy Partners (NEP - Free Report) announced that it has entered into a definite agreement with Canada Pension Plan Investment Board (“CPPIB”) to sell its renewable assets situated in Ontario, Canada for $582.3 million. Per the deal, the buyer will also assume NextEra Energy Partners’ existing debt of $689 million.
NextEra Energy Partners expects that the sale of Canadian renewable portfolio will be over by second-quarter 2018, subject to customary closing conditions. This agreement will be accretive to the partnership’s long-term growth. In addition, the partnership is planning to invest the Canadian assets sale proceeds in the United States to benefit from a longer federal income tax shield and lower effective corporate tax rate.
The renewable portfolio of NextEra Energy Partners includes four wind and two solar projects, with a total capacity of 396 megawatts (MW).
NextEra Energy Partners’ Gain
The partnership will reinvest the Canadian proceeds to acquire higher-yielding U.S. assets from either third parties or NextEra Energy Resources. The redeployment of funds in the high yield projects will allow the partnership to retain more Cash available for Distribution (“CAFD’) in the future, for every $1 invested, compared with Canadian renewable earnings.
Rising Usage of Renewables
Per the U.S. Energy Information Administration (EIA), the U.S. renewable consumption will increase from 2017 level of 11.054 quadrillion BTU to 11.154 and 11.519 quadrillion BTU in 2018 and 2019, respectively.
NextEra Energy Partners, LP is a growth-oriented limited partnership formed by NextEra Energy, Inc. (NEE - Free Report) to focus on clean energy projects having long-term cash flows. Renewable energy production results in generous tax credits.
Recently, NextEra Energy signed a deal to purchase solar panel from JinkoSolar Holding Co., Ltd. (JKS - Free Report) and 2,750 MWs of high-efficiency solar modules. NextEra Energy aims to expand its present solar capacity of 930 MW to beyond 4,000 MW over the next decade.
Price Movement
In the last month, units of NextEra Energy Partners have returned 4.9% outperforming the 6.1% decline of the industry it belongs to.
EOG Resources reported an average positive earnings surprise of 25.67% in the last four quarters. Long-term earnings growth is pegged at 7.64%. Its 2018 earnings estimate moved up 35.9% to $4.27 in the last 60 days.
What Lies Ahead
The partnership did not revise its adjusted EBITDA and CAFD. NextEra Energy Partners expects its EBITDA and CAFC for 2018 to be in the range of 1.00-$1.15 billion and $360-$400 million, respectively.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early
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NextEra Energy Partners to Sell Canadian Assets for $582M
NextEra Energy Partners (NEP - Free Report) announced that it has entered into a definite agreement with Canada Pension Plan Investment Board (“CPPIB”) to sell its renewable assets situated in Ontario, Canada for $582.3 million. Per the deal, the buyer will also assume NextEra Energy Partners’ existing debt of $689 million.
NextEra Energy Partners expects that the sale of Canadian renewable portfolio will be over by second-quarter 2018, subject to customary closing conditions. This agreement will be accretive to the partnership’s long-term growth. In addition, the partnership is planning to invest the Canadian assets sale proceeds in the United States to benefit from a longer federal income tax shield and lower effective corporate tax rate.
The renewable portfolio of NextEra Energy Partners includes four wind and two solar projects, with a total capacity of 396 megawatts (MW).
NextEra Energy Partners’ Gain
The partnership will reinvest the Canadian proceeds to acquire higher-yielding U.S. assets from either third parties or NextEra Energy Resources. The redeployment of funds in the high yield projects will allow the partnership to retain more Cash available for Distribution (“CAFD’) in the future, for every $1 invested, compared with Canadian renewable earnings.
Rising Usage of Renewables
Per the U.S. Energy Information Administration (EIA), the U.S. renewable consumption will increase from 2017 level of 11.054 quadrillion BTU to 11.154 and 11.519 quadrillion BTU in 2018 and 2019, respectively.
NextEra Energy Partners, LP is a growth-oriented limited partnership formed by NextEra Energy, Inc. (NEE - Free Report) to focus on clean energy projects having long-term cash flows. Renewable energy production results in generous tax credits.
Recently, NextEra Energy signed a deal to purchase solar panel from JinkoSolar Holding Co., Ltd. (JKS - Free Report) and 2,750 MWs of high-efficiency solar modules. NextEra Energy aims to expand its present solar capacity of 930 MW to beyond 4,000 MW over the next decade.
Price Movement
In the last month, units of NextEra Energy Partners have returned 4.9% outperforming the 6.1% decline of the industry it belongs to.
Zacks Rank
NextEra Energy Partners has a Zacks Rank #3 (Hold). A better-ranked stock from the same sector worth considering is EOG Resources Inc. (EOG - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
EOG Resources reported an average positive earnings surprise of 25.67% in the last four quarters. Long-term earnings growth is pegged at 7.64%. Its 2018 earnings estimate moved up 35.9% to $4.27 in the last 60 days.
What Lies Ahead
The partnership did not revise its adjusted EBITDA and CAFD. NextEra Energy Partners expects its EBITDA and CAFC for 2018 to be in the range of 1.00-$1.15 billion and $360-$400 million, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early
See Zacks' 3 Best Stocks to Play This Trend >>