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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 operations through organic projects and acquisitions. A strong investment plan and the addition of renewable generation assets will further boost its performance. Given its growth opportunities, NEE makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this currently Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for NEE’s 2023 earnings per share (EPS) is pinned at $3.12, indicating year-over-year growth of 7.6%.
The Zacks Consensus Estimate for 2023 sales is pinned at $27.52 billion, indicating a year-over-year increase of 31.3%.
NEE’s long-term (three to five years) earnings growth rate is 8.18%. It delivered an average earnings surprise of 7.3% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, NextEra Energy’s ROE is 12.15%, higher than the industry’s average of 6.99%. This indicates that the company has been utilizing its funds more constructively than its peers in the electric power utility industry.
Debt Position
Currently, NextEra Energy’s total debt to capital is 56.59%, much better than the industry’s average of 61.19%.
The time to interest earned ratio at the end of third-quarter 2023 was 4.8. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
Dividend History
NextEra Energy has been increasing its shareholders’ value through dividend payments. Currently, its quarterly dividend is 46.75 cents per share. This represents an annualized dividend of $1.87 per share, up 10% from the previous annual rate of $1.7. The company’s current dividend yield is 3.14% compared with the Zacks S&P 500 Composite's average of 1.4%.
Systematic Investments
NextEra Energy's subsidiaries, Florida Power & Light Company (FPL) and Gulf Power, invested $9.2 billion in various projects in 2022 and aim to invest in the range of $9-$9.5 billion in 2023. FPL plans to invest nearly $14.6 billion in Transmission & Distribution projects during the remainder of 2023-2027 to support customer growth.
Price Performance
In the past months, NEE’s shares have rallied 2.6% compared with the industry’s average growth of 1.4%.
Consolidated Edison’s long-term earnings growth rate is 2%. The Zacks Consensus Estimate for the company’s 2023 EPS is pinned at $5.01, implying a year-over-year increase of 10.1%.
IDACORP’s long-term earnings growth rate is 4.11%. The consensus estimate for the company’s 2023 EPS is pegged at $5.12, indicating a year-over-year improvement of 0.2%.
OGE Energy’s long-term earnings growth rate is 3.65%. It delivered an average earnings surprise of 8.3% in the last four quarters.
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Reasons to Add NextEra Energy (NEE) to Your Portfolio Now
NextEra Energy, Inc. (NEE - Free Report) continues to expand its operations through organic projects and acquisitions. A strong investment plan and the addition of renewable generation assets will further boost its performance. Given its growth opportunities, NEE makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this currently Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for NEE’s 2023 earnings per share (EPS) is pinned at $3.12, indicating year-over-year growth of 7.6%.
The Zacks Consensus Estimate for 2023 sales is pinned at $27.52 billion, indicating a year-over-year increase of 31.3%.
NEE’s long-term (three to five years) earnings growth rate is 8.18%. It delivered an average earnings surprise of 7.3% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, NextEra Energy’s ROE is 12.15%, higher than the industry’s average of 6.99%. This indicates that the company has been utilizing its funds more constructively than its peers in the electric power utility industry.
Debt Position
Currently, NextEra Energy’s total debt to capital is 56.59%, much better than the industry’s average of 61.19%.
The time to interest earned ratio at the end of third-quarter 2023 was 4.8. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
Dividend History
NextEra Energy has been increasing its shareholders’ value through dividend payments. Currently, its quarterly dividend is 46.75 cents per share. This represents an annualized dividend of $1.87 per share, up 10% from the previous annual rate of $1.7. The company’s current dividend yield is 3.14% compared with the Zacks S&P 500 Composite's average of 1.4%.
Systematic Investments
NextEra Energy's subsidiaries, Florida Power & Light Company (FPL) and Gulf Power, invested $9.2 billion in various projects in 2022 and aim to invest in the range of $9-$9.5 billion in 2023. FPL plans to invest nearly $14.6 billion in Transmission & Distribution projects during the remainder of 2023-2027 to support customer growth.
Price Performance
In the past months, NEE’s shares have rallied 2.6% compared with the industry’s average growth of 1.4%.
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Other Stocks to Consider
A few other top-ranked stocks from the same industry are Consolidated Edison Inc. (ED - Free Report) , IDACORP Inc. (IDA - Free Report) and OGE Energy Corp. (OGE - Free Report) , each holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Consolidated Edison’s long-term earnings growth rate is 2%. The Zacks Consensus Estimate for the company’s 2023 EPS is pinned at $5.01, implying a year-over-year increase of 10.1%.
IDACORP’s long-term earnings growth rate is 4.11%. The consensus estimate for the company’s 2023 EPS is pegged at $5.12, indicating a year-over-year improvement of 0.2%.
OGE Energy’s long-term earnings growth rate is 3.65%. It delivered an average earnings surprise of 8.3% in the last four quarters.