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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Nextera Energy, Inc. (XNYS:NEE) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
NEE
Name:
NEXTERA ENERGY, INC. (XNYS:NEE)
Sector:
- 205000.00K
Industry:
Utilities�Regulated Electric
CEO:
Mr. James Robo
Total Employees:
15,000
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 71.79% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF NEXTERA ENERGY, INC.(NEE) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND UTILITIES�REGULATED ELECTRIC INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
85.11
One Month Price Target:
$85.33
Six Month Price Target :
$86.45
Likely Price in One Year's Time:
Ticker:
$87.79
Likely Trading Range Today Under (Normal Volatility)
$84.88
Price Upper limit ($) :
$85.47
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$81.6
This week:
$77.26
This month :
$69.4
Other Primary facts
Market Cap:
167.22B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
1.96B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.69%
-13.42%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$101.40
$93.85
$68.82
$76.37
Medium risk (<10%) entry points
Buy Call
Sell Call
$91.39
Buy Put:
Sell Put:
$89.78
$78.81
$80.44
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
NEE
Sharpe Ratio:
3.20%
Comparison:
NEE, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 173.53% higher than the industry
& ratio is 40.59% higher than the market/S&P 500 average
Average Returns/Yield of
NEE
Daily returns:
0.07%
Weekly returns:
0.37%
Monthly returns:
1.49%
Yearly returns:
7.85%
Comparison of returns:
Average annual returns/yield (last 3 years) is 127.55% above industry average
Classification:
NEE, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.88
Statistical test of Returns:
NEE has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.05%
Weekly Volatility:
4.57%
Monthly Volatility:
9.15%
Yearly Volatility:
31.69%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.35%
Volatility in last five trading days has been -34.22% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.13%
Weekly VaR:
-9.23%
Monthly VaR:
-18.46%
How Much Can the price of
NEE
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-15%
Worst case (decline):
-63.93%
This translates to price declining to:
$71.95
This translates to price declining to:
$30.70
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
NEE is a 30.26% riskier investment compared to the market/S&P 500 & is 11.59% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 0.81% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
NEE
Beta in relation to market/S&P 500--0.47
Expected beta in 1 year's time:
0.753
Expected beta in 3 year's time:
1.065
Unlevered (debt free) Beta:
0.681
Beta in relation to Nasdaq (XNAS):
0.656
Beta in relation to all global stocks::
0.681
Beta Comparison & Analysis
Beta of competitors/peers::
0.482
Beta is -2.68% lower than peers
Average Industry Beta:
0.5
Beta is -6.17% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
1.44%
Sustainable growth rate is -58.74% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.115
Alpha is 801.47% above industry average alpha yield
Alpha is 732% higher than market/& is unsustainably high
Analysis of Cost of Capital of
NEE
Equity cost of capital:
0.064
Equity cost of capital is -3.21% below industry mean WACC
Unlevered (without debt) cost of capital:
9.24%
Before-tax cost of debt:
3.39%
After-tax cost of debt:
2.68%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.68%
WACC is -5.07% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$8.26
Revenue growth rate per share of (3Y):
3.78
Annual revenue growth rate is -51.82% below industry average
EPS:
$0.74
Expected Annual growth rate of EPS (3Y):
-2.06%
Expected future EPS growth rate is -66.62% lower than the Utilities�Regulated Electric industry
Free cash flow (FCF) per share:
-
Balance sheet equity growth per share: 40.23%
Equity growth rate per share is 585.54% higher than the industry
Debt per share
$25.94
EBITDA per share
$4.08
Valuation Analysis Today of
NEE
P/E Ratio:
65.16
P/E Ratio of Competitors/Peers:
21.77
P/E ratio is 199.25% higher than main peers & is 135.34% higher than the industry
Stock price/value with industry average P/E ratio: $20.49
NEE is 315.39% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
10.3
Price to sales ratio is 254.85% above the industry mean
P/B (Price to book value ratio):
3.78
-
-
Net income growth rate (3Y):
-47.56%
Net income growth rate is 1514.61% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 57.42%
Dividend yeild: 1.90%
Previous Dividend: $0.43
Previous adjusted dividend: $0.43
Previous Dividend: $1.62
Expected next dividend best case: $0.80
Expected next dividend worst case: $0.05
Average dividend payment (long-term): $0.65
Average dividend increase/decrease (growth rate) % per period: 18.24%
Expected next dividend payment date: 13/09/2022
Expected next dividend record date: 29/08/2022
Expected next dividend declaration date: 17/08/2022
Previous dividend payment date: 15/06/2022
Previous dividend record date: 31/05/2022
Previous dividend declaration date: 19/05/2022
Dividend History:
2022-05-27--$0.43
2021-11-24--$0.39
2021-06-01--$0.39
2022-02-28--$0.43
2021-08-26--$0.39
2021-02-25--$0.39
Dividend growth rate is -1924.09% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
142.04%
Net debt to equity ratio:
146.72%
Debt to assets ratio:
35.17%
Net debt to assets ratio:
36.33%
Debt-to-asset ratio is -44.04% below industry average
Ability to repay debt:
Interest coverage ratio:
4.38
Interest coverage ratio is 69.96% more than industry average
Looking forward:
Debt growth rate:
14.01%
Annual debt growth is -70% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.658
Statistical significance of correlation:
NEE has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.597
Stock price is 10.32% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.597
Correlation of price movement with Nasdaq (^IXIC):
0.006
Covariance of price movement with the market:
0.007
Kurtosis
8.867
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.03
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
NEE
Gross Profit Margin Ratio:
204%
Operating Profit Margin Ratio:
9.05%
Operating profit margin is -22.22% lower than the industry
Net Profit Margin Ratio:
204%
Effective Tax Rate:
121.93%
Effective tax rate is 505.51% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
4.06%
Return on equity (ROE) is -55.37% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
1.00%
Return on assets (ROA) is -56.56% lower than the industry
Financial Leverage:
1.5x
Current Ratio:
0.49
Current ratio is -79.53% below industry average
Cash Conversion Cycle (days):
-194.9
Cash conversion cycle is -306.35% below industry average
The remaining useful life of property plant & equipment is: 3.6 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
1.1M
Each employee generates -61% less revenue than industry average revenue per employee
EBITDA generated per employee:
534.7K
Each employee generates -54% less EBITDA than industry average revenue per employee
Profit generated per employee:
97.1K
Each employee generates -76% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 13.7K
Each employee generates -59% less free cash flow than industry average revenue per employee
Assets/Capital per employee
8.9M
Each employee generates -59% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
NEE
DUKE ENERGY CORPORATION (XNYS:DUK)
THE SOUTHERN COMPANY (XNYS:SO)
DUK-PA
DOMINION ENERGY SRS A UNT (XNYS:DCUE)
NATIONAL GRID PLC (XNYS:NGG)
AMERICAN ELECTRIC POWER COMPANY, INC. (XNAS:AEP)
SEMPRA ENERGY (XNYS:SRE)
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED (XNYS:PEG)
AMERICAN WATER WORKS COMPANY, INC. (XNYS:AWK)
Current Analyst Ratings
Strong buy�21%
Buy�33%
Hold�8%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
16.23B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
7.95B
8.28B
-
-
-
-
8.12B
8.12B
14.00M
1.83B
4.28B
8.02B
1.47B
1.46B
374.00M
456.00M
1.46B
Statement of Cash Flow
Date:
Period:
885.00M
Differed Income Tax :
- 14000.00K
Stock Based Compensation :
-
Change in Working Capital :
- 479000.00K
Accounts Receivables:
-
Other Working Capital:
- 11435000.00K
Other Non-Cash Items:
2.02B
Net Cash Provided by Operating Activities:
1.96B
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 1212000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
1.48B
-
1.48B
4.29B
1.59B
3.63B
10.99B
101.94B
4.84B
-
-
-
27.18B
133.96B
-
144.95B
-
3.16B
-
485.00M
18.78B
22.42B
50.97B
19.08B
78.27B
-
100.69B
20.00M
24.63B
- 20000.0K
11.26B
March 31, 2022 at 6:00:00 AM
16.08B
35.89B
136.58B
-
54.13B
52.7B
1.08B
- 4565000.00K
- 4693000.00K
-
1.00M
-
- 836000.00K
4.99B
4.15B
-
1.42B
2.74B
1.32B
1.96B
- 2167000.00K
- 205000.00K
Our Proprietary Portfolio Rating
Our Rating:
A
Price Forecast/Expected Price in Next 5 Years of
NEE
2023
2024
2025
2026
2027
$70.62
$72.84
$75.14
$77.51
$79.95