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2023-12-16
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NEE
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Below is Validea's guru fundamental report for NEXTERA ENERGY INC (NEE). Of the 22 guru strategies we follow, NEE rates highest using our Multi-Factor Investor model based on the published strategy of Pim van Vliet. This multi-factor model seeks low volatility stocks that also have strong momentum and high net payout yields.
NEXTERA ENERGY INC (NEE) is a large-cap growth stock in the Electric Utilities industry. The rating using this strategy is 50% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
MARKET CAP: PASS
STANDARD DEVIATION: PASS
TWELVE MINUS ONE MOMENTUM: NEUTRAL
NET PAYOUT YIELD: NEUTRAL
FINAL RANK: FAIL
Detailed Analysis of NEXTERA ENERGY INC
NEE Guru Analysis
NEE Fundamental Analysis
More Information on Pim van Vliet
Pim van Vliet Portfolio
About Pim van Vliet: In investing, you typically need to take more risk to get more return. There is one major exception to this in the factor investing world, though. Low volatility stocks have been proven to outperform their high volatility counterparts, and do so with less risk. Pim van Vliet is the head of Conservative Equities at Robeco Asset Management. His research into conservative factor investing led to the creation of this strategy and the publication of the book "High Returns From Low Risk: A Remarkable Stock Market Paradox". Van Vliet holds a PhD in Financial and Business Economics from Erasmus University Rotterdam.
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About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-16
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NEE
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The energy sector has had a down year in 2023. Rising interest rates and falling commodity prices weighed on the industry. While the S&P 500 has rallied more than 20% this year, energy stocks in that index are down by more than 3% on average.
However, while last year was a down year for the energy sector, 2024 could be a bounce-back year. Because of that, energy stocks could deliver strong total returns. NextEra Energy (NYSE: NEE), Brookfield Renewable (NYSE: BEP)(NYSE: BEPC), and Kinder Morgan (NYSE: KMI) stand out to a few Fool.com contributors as the best ones to buy heading into 2024. Here's why they think these energy stocks could put a charge in your portfolio next year.
NextEra Energy is targeting 10% dividend growth
Reuben Gregg Brewer (NextEra Energy): Looking at the energy sector from a broad perspective it includes boring utility stocks. But there's one utility stock that has proven it is anything but boring, at least on the dividend front, and that's NextEra Energy. This industry giant, with a market cap of $122 billion, has increased its dividend annually for 29 years and at a compound annual rate of 10% over the past decade. Those would be impressive stats for any company, let alone a utility.
The key to NextEra's success is that it is really two companies in one. The foundation is NextEra's regulated utility operations, which largely consists of Florida Power & Light. This is a slow and steady performer benefiting from operating in a state that's seen steady population growth. Regulated assets have monopolies in the areas they serve but must get the rates they charge and their investment plans approved by the government. While this generally leads to slow growth, that growth is fairly dependable regardless of the market environment.
On top of this slow and steady business, NextEra has built one of the world's largest clean energy companies. This business is expected to keep growing for years as the world shifts toward renewable power. To provide some scale to the opportunity, NextEra's renewable power business has 34 gigawatts of capacity today with plans to increase that by as much as 41 gigawatts by 2026.
At this point, management expects to increase the dividend by 10% at least until 2024 with earnings growth of between 6% and 8% a year expected through at least 2026. Meanwhile, the dividend yield is historically high today at 3.1%, suggesting the stock is on sale.
The power to continue growing in 2024
Neha Chamaria (Brookfield Renewable): Despite regaining some ground in recent weeks, shares of Brookfield Renewable have hugely underperformed the market in 2023. Rising interest rates are largely to blame as they can hinder plans for companies like Brookfield Renewable that bank on cheap debt to fund growth. The market's fears were exacerbated when Brookfield's peer NextEra Energy Partners slashed its growth targets in September, citing funding challenges in a high interest rate environment.
Yet, Brookfield Renewable hasn't stopped growing, and the drop in the renewable energy stock's price makes it an enticing energy stock now. In the nine months that ended Sept. 30, Brookfield's funds from operations (FFO) grew 7.7% year over year. Management didn't mince words, stating that it wasn't pleased to see its share price fall. Management's outlook for the business, however, is better than ever, and it remains focused on long-term growth.
It also sees plenty of opportunities to deploy capital at or above its target returns as demand for clean energy continues to rise even as several market participants find it harder to access capital amid high interest rates. In other words, Brookfield Renewable may not cut back on its growth spending in the near term, contrary to what the market fears.
Driven primarily by its development pipeline and acquisitions, Brookfield Renewable grew its FFO per unit by 10% annually over the past decade and is targeting a similar 10% or more annual FFO growth rate through 2028. It also expects to increase its dividend by 5% to 9% annually, hoping to deliver 12% to 15% total returns to shareholders. With Brookfield Renewable shares yielding 5%, investors who buy the stock now can expect strong returns in the long term.
There's lots of optionality heading into 2024
Matt DiLallo (Kinder Morgan): Kinder Morgan's energy infrastructure business generates very stable cash flow. The company gets two-thirds of its earnings from take-or-pay contracts and commodity-priced hedges, which lock in its cash flow. Meanwhile, another 26% is fee-based earnings with no commodity price exposure. That gives Kinder Morgan lots of visibility into its cash flow.
The pipeline giant expects to produce about $5 billion, or $2.21 per share, of distributable cash flow next year. That's 5% above what it anticipates producing this year. That predictability gave Kinder Morgan the confidence to increase its already high-yielding dividend (recently 6.4%) by another 1.8% for next year, extending its streak to seven straight years of dividend growth.
While its contracts lock in most of its cash flow, the company has lots of upside potential. Its current financial expectations don't include any impact from STX Midstream. The company recently agreed to buy the natural gas pipeline operation from NextEra Energy Partners in a $1.8 billion deal. It anticipates that the transaction will be accretive to its cash flow in 2024 and beyond.
Meanwhile, it has a lot of financial flexibility even after completing that sizable transaction, which should close in the first quarter of next year. Kinder Morgan is currently on track to end 2024 with a 3.8 times leverage ratio, well below its 4.5 times target. While the company will use some of its financial capacity to close the STX Midstream deal, the transaction will only increase its leverage ratio by 0.1 times next year while being leverage-neutral over the long term.
That gives Kinder Morgan lots of financial flexibility heading into 2024. It can opportunistically deploy that capacity on share repurchases, value-enhancing acquisitions like STX Midstream, and sanctioning additional high-return organic expansion projects. Future capital deployment could further boost its cash flow per share, giving Kinder Morgan more fuel to grow its dividend.
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Matthew DiLallo has positions in Brookfield Renewable, Brookfield Renewable Partners, Kinder Morgan, NextEra Energy, and NextEra Energy Partners. Neha Chamaria has no position in any of the stocks mentioned. Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Brookfield Renewable, Kinder Morgan, and NextEra Energy. The Motley Fool recommends Brookfield Renewable Partners. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-15
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NEE
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By Tim McLaughlin
Dec 15 (Reuters) - Exxon Mobil’s income tax payments to the U.S. government have dropped to 3% over the past five years – several times below the company’s 20-year average – on massive deductions passed under former President Donald Trump.
Corporate tax experts say Exxon could enjoy low taxes for several more years, at a time when the government needs more money to fund an ambitious fight against climate change. President Joe Biden’s minimum corporate tax is off to a shaky start and calculation of the 15% tax factors in the Trump accelerated depreciation deductions that Exxon used last year.
That lowered its tax rate to a rock-bottom 2.5% on domestic profit of $28.3 billion, according to the "current federal income tax expense" Exxon disclosed in its annual report.
“If you view the use of these tax breaks as a problem, Biden’s new minimum tax is unlikely to end that,” said Matt Gardner, a senior fellow at the nonpartisan Institute on Taxation of Economic Policy (ITEP) in Washington D.C.
In sharp contrast, the most valuable companies representing major sectors of the U.S. economy paid an average tax rate on domestic profits at least seven times higher than Exxon, according to a Reuters analysis of the companies' latest annual financial reports. The group includes Apple, Meta Platforms, JPMorgan Chase, Sherwin-Williams and Union Pacific.
Exxon’s recent tax advantage reveals how the U.S. tax code hinders the Biden administration’s push to be a world leader in limiting fossil fuels. The corporate minimum tax is the main source of revenue for the president’s green energy agenda in the 2022 Inflation Reduction Act.
The Internal Revenue Service (IRS), however, has delayed a roll out of the tax, which has been roiled by complexity and confusion, said Will McBride, vice president of tax policy at the Tax Foundation, a pro-business think tank.
“There is nothing in the (corporate minimum tax) to guarantee a 15% minimum rate,” McBride said.
The White House declined to comment for this story, but a spokesperson pointed to Biden's public commitment to end "tens of billions of dollars of federal tax subsidies for oil and gas companies."
Since 2003, Exxon’s current federal income tax expense – a proxy experts use to divine what companies pay on U.S. tax returns – averaged 17% for the 16 years the company generated a pre-tax profit from domestic operations, according to Exxon financial disclosures.
But since Trump’s Tax Cuts and Jobs Act became law in 2017, Exxon’s rate has plummeted to less than 3% in the three years when the company’s domestic operations showed a profit, the disclosures show.
Last year, for example, Exxon’s tax rate was 2.5%, or $696 million, on record pre-tax U.S. profit of $28.3 billion. Exxon would have paid nearly $6 billion at the federal statutory tax rate of 21%.
Exxon said, however, its U.S. income tax liability for 2022 was "several billion dollars" and the highest amount paid in more than 10 years. The company declined to elaborate why that amount was so much higher than the current federal income tax expense figure it provided to investors.
Before this year, Trump’s accelerated depreciation allowed companies to immediately deduct 100% of the billions of dollars many spend each year on property and equipment, up from 50% previously. The incentives, phased down to 80% this year, extend to all sectors of the economy, but they are amplified in the fossil fuel sector due to the capital-intensive nature of extracting oil and gas.
Exxon capitalized on the deductions in 2022, for example, after spending $9.5 billion on U.S.-based capital and exploration projects, including in the Permian Basin oil and gas field and on a Beaumont, Texas refinery expansion, company financial disclosures show.
“Sure enough, industry lobbyists are now back trying to get Congress to extend the tax break,” U.S. Senator Sheldon Whitehouse, a Rhode Island Democrat, told Reuters.
Russ Hamilton, an accounting professor at Southern Methodist University’s Cox School of Business, said that under normal circumstances the cumulative tax benefit from accelerated depreciation is meant to zero out over time as annual capital investments slow.
But if companies continue to spend money on large capital projects – like finding and developing new oil fields - payments on deferred income taxes can be postponed for years.
“These deferred income tax liabilities can go on forever," said Donald Williamson, an accounting professor at American University’s Kogod School of Business.
Exxon U.S. Income Tax: A 20-year history https://tmsnrt.rs/3RFH3nr
(Reporting By Tim McLaughlin in Boston; Editing by Richard Valdmanis and David Gregorio)
((tim.mclaughlin@thomsonreuters.com; +1 617-620-3471; Reuters Messaging: Tim.McLaughlin.thomsonreuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-15
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NEE
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Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Let's take a look at what these Wall Street heavyweights have to say about NextEra Energy (NEE) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
NextEra currently has an average brokerage recommendation (ABR) of 1.73, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 15 brokerage firms. An ABR of 1.73 approximates between Strong Buy and Buy.
Of the 15 recommendations that derive the current ABR, 10 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 66.7% and 6.7% of all recommendations.
Brokerage Recommendation Trends for NEE
Check price target & stock forecast for NextEra here>>>
The ABR suggests buying NextEra, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.
ABR Should Not Be Confused With Zacks Rank
In spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.
Is NEE Worth Investing In?
Looking at the earnings estimate revisions for NextEra, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at $3.12.
Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for NextEra. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for NextEra.
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NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-15
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NEE
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To become a "Dividend Aristocrat," a dividend paying company must accomplish an incredible feat: consistently increase shareholder dividends every year for at least 20 consecutive years. Companies with this kind of track record tend to attract a lot of investor attention — and furthermore, "tracking" funds that follow the Dividend Aristocrats Index must own them. With all of this demand for shares, dividend growth stocks can sometimes become "fully priced," where there isn't much upside to analyst targets.
But we here at ETF Channel have looked through the underlying holdings of the SPDR S&P Dividend ETF (which tracks the S&P High Yield Dividend Aristocrats Index), and found these five dividend growth stocks that actually still have fairly substantial upside to the average analyst target price 12 months out. Which means, if the analysts are correct, these are five dividend growth stocks that could produce capital gains in addition to their growing dividend payments.
In the first table below, we present the five stocks. The recent share price, average analyst 12-month target price, and percentage upside to reach the analyst target are presented.
STOCK RECENT PRICE AVG. ANALYST 12-MO. TARGET % UPSIDE TO TARGET
NextEra Energy Inc (Symbol: NEE) $62.78 $71.57 14.00%
Brown & Brown Inc (Symbol: BRO) $71.96 $78.00 8.39%
Berkley Corp (Symbol: WRB) $71.17 $75.78 6.47%
Automatic Data Processing Inc. (Symbol: ADP) $235.97 $250.57 6.19%
Church & Dwight Co Inc (Symbol: CHD) $91.36 $96.20 5.30%
The average 12-month analyst targets are only targets for the share price however, and each of these stocks are expected to pay dividends during that holding period — so the expected total return if these stocks reach their analyst targets is actually the share price upside seen by the analysts plus the dividend yield shareholders can expect. To ballpark that total return potential, we have added the current yield to the analyst target price upside, in order to arrive at the 12-month total return potential:
STOCK DIVIDEND YIELD % UPSIDE TO ANALYST TARGET IMPLIED TOTAL RETURN POTENTIAL
NextEra Energy Inc (Symbol: NEE) 2.98% 14.00% 16.98%
Brown & Brown Inc (Symbol: BRO) 0.72% 8.39% 9.11%
Berkley Corp (Symbol: WRB) 0.62% 6.47% 7.09%
Automatic Data Processing Inc. (Symbol: ADP) 2.37% 6.19% 8.56%
Church & Dwight Co Inc (Symbol: CHD) 1.19% 5.30% 6.49%
Another consideration with dividend growth stocks is just how much the dividend is growing. We looked up the trailing twelve months worth of dividends shareholders of each of the above five companies have collected, and then also looked up the same number for the prior trailing twelve months. This gives us a rough yardstick to see how much the dividend has grown, from one trailing twelve month period to another.
STOCK PRIOR TTM DIVIDEND TTM DIVIDEND % GROWTH
NextEra Energy Inc (Symbol: NEE) $1.7 $1.872 10.12%
Brown & Brown Inc (Symbol: BRO) $0.424 $0.475 12.03%
Berkley Corp (Symbol: WRB) $0.786666666666667 $1.42 80.51%
Automatic Data Processing Inc. (Symbol: ADP) $4.37 $5.15 17.85%
Church & Dwight Co Inc (Symbol: CHD) $1.052 $1.092 3.80%
These five stocks are part of our full Dividend Aristocrats List. The average analyst target price data upon which this article was based, is courtesy of data provided by Zacks Investment Research via Quandl.com.
Get the latest Zacks research report on ADP — FREE
Get the latest Zacks research report on CHD — FREE
Dividend Growth Stocks: 25 Aristocrats »
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-14
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NEE
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The latest trading session saw NextEra Energy (NEE) ending at $62.78, denoting a +0.43% adjustment from its last day's close. The stock exceeded the S&P 500, which registered a gain of 0.27% for the day. Elsewhere, the Dow gained 0.43%, while the tech-heavy Nasdaq added 0.19%.
Shares of the parent company of Florida Power & Light Co. Have appreciated by 9.67% over the course of the past month, underperforming the Utilities sector's gain of 10.86% and outperforming the S&P 500's gain of 6.94%.
The upcoming earnings release of NextEra Energy will be of great interest to investors. The company is expected to report EPS of $0.51, unchanged from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $6.17 billion, showing a 0.14% escalation compared to the year-ago quarter.
For the full year, the Zacks Consensus Estimates project earnings of $3.12 per share and a revenue of $27.52 billion, demonstrating changes of +7.59% and +31.32%, respectively, from the preceding year.
Investors should also pay attention to any latest changes in analyst estimates for NextEra Energy. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Currently, NextEra Energy is carrying a Zacks Rank of #3 (Hold).
In terms of valuation, NextEra Energy is presently being traded at a Forward P/E ratio of 20.03. For comparison, its industry has an average Forward P/E of 16.81, which means NextEra Energy is trading at a premium to the group.
Investors should also note that NEE has a PEG ratio of 2.45 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Utility - Electric Power industry currently had an average PEG ratio of 2.93 as of yesterday's close.
The Utility - Electric Power industry is part of the Utilities sector. With its current Zacks Industry Rank of 51, this industry ranks in the top 21% of all industries, numbering over 250.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-14
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NEE
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Investors in NextEra Energy Inc (Symbol: NEE) saw new options begin trading today, for the February 2024 expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the NEE options chain for the new February 2024 contracts and identified one put and one call contract of particular interest.
The put contract at the $62.50 strike price has a current bid of $1.95. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $62.50, but will also collect the premium, putting the cost basis of the shares at $60.55 (before broker commissions). To an investor already interested in purchasing shares of NEE, that could represent an attractive alternative to paying $63.45/share today.
Because the $62.50 strike represents an approximate 2% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 3.12% return on the cash commitment, or 17.79% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for NextEra Energy Inc, and highlighting in green where the $62.50 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $67.50 strike price has a current bid of $1.25. If an investor was to purchase shares of NEE stock at the current price level of $63.45/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $67.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 8.35% if the stock gets called away at the February 2024 expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if NEE shares really soar, which is why looking at the trailing twelve month trading history for NextEra Energy Inc, as well as studying the business fundamentals becomes important. Below is a chart showing NEE's trailing twelve month trading history, with the $67.50 strike highlighted in red:
Considering the fact that the $67.50 strike represents an approximate 6% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 1.97% boost of extra return to the investor, or 11.24% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 251 trading day closing values as well as today's price of $63.45) to be 29%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-14
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NEE
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Below is Validea's guru fundamental report for NEXTERA ENERGY INC (NEE). Of the 22 guru strategies we follow, NEE rates highest using our Multi-Factor Investor model based on the published strategy of Pim van Vliet. This multi-factor model seeks low volatility stocks that also have strong momentum and high net payout yields.
NEXTERA ENERGY INC (NEE) is a large-cap growth stock in the Electric Utilities industry. The rating using this strategy is 50% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
MARKET CAP: PASS
STANDARD DEVIATION: PASS
TWELVE MINUS ONE MOMENTUM: NEUTRAL
NET PAYOUT YIELD: NEUTRAL
FINAL RANK: FAIL
Detailed Analysis of NEXTERA ENERGY INC
NEE Guru Analysis
NEE Fundamental Analysis
More Information on Pim van Vliet
Pim van Vliet Portfolio
About Pim van Vliet: In investing, you typically need to take more risk to get more return. There is one major exception to this in the factor investing world, though. Low volatility stocks have been proven to outperform their high volatility counterparts, and do so with less risk. Pim van Vliet is the head of Conservative Equities at Robeco Asset Management. His research into conservative factor investing led to the creation of this strategy and the publication of the book "High Returns From Low Risk: A Remarkable Stock Market Paradox". Van Vliet holds a PhD in Financial and Business Economics from Erasmus University Rotterdam.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-14
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NEE
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NextEra Energy Partners (NYSE: NEP), the debt-laden subsidiary of NextEra Energy (NYSE: NEE), just refinanced about 11% of its debt, but the cost to pay that debt went up 71%. In this video, Motley Fool contributors Jason Hall and Tyler Crowe break down how this could be just the tip of the iceberg for rising interest costs that could upend the dividend. It could also cause serious problems for its parent company's cash flows, too.
*Stock prices used were from the afternoon of Dec. 5, 2023. The video was published on Dec 12, 2023.
Should you invest $1,000 in NextEra Energy right now?
Before you buy stock in NextEra Energy, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and NextEra Energy wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
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*Stock Advisor returns as of December 11, 2023
Jason Hall has positions in NextEra Energy Partners. Tyler Crowe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends NextEra Energy. The Motley Fool has a disclosure policy. Jason Hall is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-14
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NEE
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If there's one constant on Wall Street, it's that things change. After holding up surprisingly well during the 2022 bear market, the utility sector has been Wall Street's worst performer in 2023, as of Dec. 1.
Most investors flock to utility stocks for their dividends and low volatility. Consumption habits for electricity, water, and natural gas don't change much from one year to the next. This often leads to highly predictable operating cash flow and the ability for utility stocks to pass along market-topping yields.
However, rapidly rising interest rates have created the perfect storm for this traditional safe haven. With Treasury yields soaring to around 5%, investors have been able to pile into longer-term bonds and short-term Treasury bills to net an equal or greater return than most utility stocks -- but with far less risk.
Image source: Getty Images.
The good news for utility stocks is that Federal Reserve rate cuts are back on the table for 2024. As a result, Treasury yields have been retreating. The lower Treasury yields go, the more attractive this safe-haven sector becomes.
As we steam toward a new year, two utility stocks stand out as truly phenomenal buys, while another high-profile utility stock is best avoided.
Utility stock No. 1 to buy hand over fist in 2024: NextEra Energy
Among the more than 100 publicly traded utilities to choose from, the one that stands out as nothing short of a screaming buy for 2024 is electric utility NextEra Energy (NYSE: NEE). NextEra is the sector's largest utility by market cap ($122 billion).
In addition to being weighed down by higher bond yields, NextEra's stock took a big hit in late September and early October when NextEra Energy Partners (NYSE: NEP) slashed its dividend-growth guidance to a range of 5% to 8% through 2026 from an expected double-digit annual growth rate. Parent NextEra Energy orchestrates a number of drop-down transactions to NextEra Energy Partners, and this had investors clearly concerned that NextEra Energy's future growth may be impacted. Thankfully, NextEra Energy's third-quarter operating results and outlook put those rumors to bed.
What separates NextEra Energy from a veritable sea of electric utility stocks is its focus on renewable energy. Out of the 70 gigawatts (GW) of capacity NextEra had in operation as of Sept. 30, 34 GW were devoted to renewable energy. This includes 23 GW of wind capacity and 6 GW of solar capacity, both of which are high-water marks globally for any electric utility.
Investing in green-energy projects is undeniably costly. But the good news for NextEra Energy is that it's paying dividends. The company's electricity generation costs are considerably lower than its peers, which has led to a compound adjusted earnings-per-share growth rate of 9.8% since 2012. By comparison, most electric utilities grow their bottom lines by a low-single-digit percentage.
NextEra has no plans to slow down its green energy push, either. Between the start of 2023 and the end of 2026, an expected 32.7 GW to 41.8 GW of renewable energy is expected to be put into operation.
With NextEra Energy stock having its worst year in well over a decade, its forward price-to-earnings (P/E) ratio has fallen to 17.5. This marks the cheapest it's traded to forward-year earnings since 2015 and makes NextEra shares a phenomenal buy.
Utility stock No. 2 to buy hand over fist in 2024: York Water
A second utility stock that investors can confidently buy hand over fist in the new year is water utility York Water (NASDAQ: YORW). As you're about to see, this under-the-radar water and wastewater utility provider is "Wall Street's Greatest Dividend Stock."
Unlike NextEra Energy, which was dragged lower by the poor performance of NextEra Energy Partners, there aren't any operating red flags for York. The poor performance of its shares in 2023 seems to be solely the result of Treasury bonds offering investors a potentially safer way to generate income. Further, York Water's 2.2% yield is only marginally higher than the yield of the benchmark S&P 500.
But this dividend is what makes York so special. The company has paid a continuous dividend to its shareholders since its founding in 1816. That's 207 consecutive years -- six decades longer than any other public company in the United States. That's how rock-solid York Water is from a payout standpoint.
The consistency of York's dividend is a function of it being a regulated water and wastewater utility for 54 municipalities in South-Central Pennsylvania. By "regulated," I mean the company is unable to pass along rate hikes to its customers without the state approval of a public utility commission (in this case, the Pennsylvania Public Utility Commission, or PPUC). Being regulated ensures that York avoids wholesale pricing, which makes its operating cash flow highly predictable.
To speak further on this point, York Water was given the OK in January 2023 by the PPUC to increase rates on approximately 75,000 of its customers. This rate hike is in response to $176 million in ongoing and future infrastructure upgrades. This increase is adding $13.5 million in revenue to the company's top line in 2023, which is a roughly 22% improvement from last year.
York's ability to make earnings-accretive acquisitions shouldn't be overlooked, either. Given that utilities typically operate as monopolies or duopolies in the areas they service, homeowners and renters rarely have a choice when it comes to which company handles their services. A steady diet of bolt-on acquisitions has worked well for York Water.
Image source: Getty Images.
The utility stock to avoid like the plague in the new year: Hawaiian Electric Industries
Although the utility sector is typically a safe place to put your money to work, there's always the potential for downside. The one utility stock investors would be wise to avoid like the plague in 2024 is Hawaiian Electric Industries (NYSE: HE).
If there's one factor working in Hawaiian Electric's favor, it's that the company remains profitable on an adjusted basis. In fact, the $0.56-per-share profit reported during the September-ended quarter topped Wall Street's consensus by 4%. But that's about the only positive to bring to the table for Hawaiian Electric, which is attempting to navigate its way through a challenging situation.
The company's financial concerns stem from the tragic Lahaina wildfire that swept through Maui in mid-August, resulting in the deaths of 100 people. Dozens of outstanding lawsuits claim that Hawaiian Electric's equipment caused and/or failed to mitigate the deadly wildfire.
For its part, Hawaiian Electric is contributing $75 million out of the more than $150 million set aside for the One Ohana Initiative. This is a fund designed to help those who lost a loved one in the tragic wildfire, as well as people who were severely injured. But keep in mind that the One Ohana Initiative doesn't resolve the dozens of outstanding lawsuits against the company.
How much could it be on the hook for? Hawaiian Electric has $165 million in annual general liability insurance, according to filings with state regulators. But based on estimates from Capstone, the company is facing up to $4.9 billion in potential claims.
To make matters worse, Hawaiian Electric Industries will delay filing its financial statements. The multitude of lawsuits the company is facing, coupled with the aforementioned payout to the One Ohana Initiative, creates a mountain of financial uncertainty. This comes atop the company suspending its quarterly dividend shortly after the Lahaina fire.
The point is that Hawaiian Electric's future as a solvent business may be in doubt. Though it could be an incredible value, given its history of profitability and the infrastructure it already has in place, the dozens of lawsuits the company is facing may be a multiyear overhang. There's simply no reason for investors to take a big risk on Hawaiian Electric in 2024 when the sector is filled with time-tested, profitable, dividend-paying companies.
Should you invest $1,000 in NextEra Energy right now?
Before you buy stock in NextEra Energy, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and NextEra Energy wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 11, 2023
Sean Williams has positions in NextEra Energy. The Motley Fool has positions in and recommends NextEra Energy. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-13
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NEE
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Investors looking for stocks in the Utility - Electric Power sector might want to consider either Enel SpA (ENLAY) or NextEra Energy (NEE). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Enel SpA has a Zacks Rank of #2 (Buy), while NextEra Energy has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ENLAY has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
ENLAY currently has a forward P/E ratio of 10.48, while NEE has a forward P/E of 19.08. We also note that ENLAY has a PEG ratio of 1.47. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. NEE currently has a PEG ratio of 2.33.
Another notable valuation metric for ENLAY is its P/B ratio of 1.61. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, NEE has a P/B of 2.17.
These are just a few of the metrics contributing to ENLAY's Value grade of B and NEE's Value grade of D.
ENLAY stands above NEE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ENLAY is the superior value option right now.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Enel SpA (ENLAY) : Free Stock Analysis Report
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-13
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NEE
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Here's an eye-opening statistic: older Americans are more afraid of running out of money than of death itself.
And unfortunately, even retirees who have built a nest egg have good reason to be concerned - with the traditional approaches to retirement planning, income may no longer cover expenses. That means retirees are dipping into principal to make ends meet, setting up a race against time between dwindling investment balances and longer lifespans.
In today's economic environment, traditional income investments are not working.
For example, 10-year Treasury bonds in the late 1990s offered a yield of around 6.50%, which translated to an income source you could count on. However, today's yield is much lower and probably not a viable return option to fund typical retirements.
That means if you had $1 million in 10-year Treasuries, the difference in yield between 1999 and today is more than $1 million.
Today's retirees are getting hit hard by reduced bond yields - and the Social Security picture isn't too rosy either. Right now and for the near future, Social Security benefits are still being paid, but it has been estimated that the Social Security funds will be depleted as soon as 2035.
Unfortunately, it looks like the two traditional sources of retirement income - bonds and Social Security - may not be able to adequately meet the needs of present and future retirees. But what if there was another option that could provide a steady, reliable source of income in retirement?
Invest in Dividend Stocks
Dividend-paying stocks from low-risk, high-quality companies are a smart way to generate steady and reliable attractive income streams to replace low risk, low yielding Treasury and bond options.
Look for stocks that have paid steady, increasing dividends for years (or decades), and have not cut their dividends even during recessions.
One approach to recognizing appropriate stocks is to look for companies with an average dividend yield of 3% and positive average annual dividend growth. Numerous stocks hike dividends over time, counterbalancing inflation risks.
Here are three dividend-paying stocks retirees should consider for their nest egg portfolio.
ACNB (ACNB) is currently shelling out a dividend of $0.3 per share, with a dividend yield of 3.02%. This compares to the Banks - Southwest industry's yield of 0.29% and the S&P 500's yield of 1.66%. The company's annualized dividend growth in the past year was 7.69%. Check ACNB (ACNB) dividend history here>>>
MetLife (MET) is paying out a dividend of $0.52 per share at the moment, with a dividend yield of 3.19% compared to the Insurance - Multi line industry's yield of 1.73% and the S&P 500's yield. The annualized dividend growth of the company was 4% over the past year. Check MetLife (MET) dividend history here>>>
Currently paying a dividend of $0.47 per share, NextEra Energy (NEE) has a dividend yield of 3.14%. This is compared to the Utility - Electric Power industry's yield of 3.52% and the S&P 500's current yield. Annualized dividend growth for the company in the past year was 10%. Check NextEra Energy (NEE) dividend history here>>>
But aren't stocks generally more risky than bonds?
It is true that stocks, as an asset class, carry more risk than bonds, but high-quality dividend stocks not only have the ability to produce income growth over time but more importantly, can also reduce your overall portfolio volatility relative to the broader stock market.
An upside to adding dividend stocks to your retirement portfolio: they can help lessen the effects of inflation, since many dividend-paying companies (especially blue chip stocks) generally increase their dividends over time.
Thinking about dividend-focused mutual funds or ETFs? Watch out for fees.
If you're thinking, "I want to invest in a dividend-focused ETF or mutual fund," make sure to do your homework. It's important to know that some mutual funds and specialized ETFs charge high fees, which may diminish your dividend gains or income and thwart the overall objective of this investment strategy. If you do want to invest in fund, research well to identify the best-quality dividend funds with the least charges.
Bottom Line
Regardless of whether you select high-quality, low-fee funds or stocks, looking for a steady stream of income from dividend-paying equities can potentially lead you to a solid and more peaceful retirement.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
ACNB Corporation (ACNB) : Free Stock Analysis Report
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
MetLife, Inc. (MET) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-13
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NEE
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The past few years have seen significant investment in the energy sector. While the industry is still in the growth phase, now is the best time to take your pick and enjoy an early mover advantage with energy stocks.
This is a decade defined by climate consciousness, and countries across the world are taking the necessary steps to achieve their long-term goals. The U.S. has a target of 100% carbon-free electricity by 2035 and has committed to triple the nuclear capacity by 2050. We also saw a soaring demand for solar energy this year which benefitted dividend stocks, and while it has subsided now, we could see it pick up in the coming months. If you want to make the most of the urgency surrounding climate change but also want to enjoy passive income, here are the three energy stocks with dividends to consider.
NextEra (NEE)
Source: madamF / Shutterstock.com
NextEra Energy (NYSE:NEE) is a magnificent stock to add to your portfolio for several reasons. The company has had an excellent year and enjoyed EPS growth in the first three quarters. It is also on track to achieve projections for 2023 overall. The company has been recently suffering due to concerns about the high-interest environment and issues related to funding but these are issues of the company’s affiliate NextEra Energy Partners, which is a solely renewable energy company and wouldn’t impact the growth of NextEra Energy.
NextEra Energy is a blend of both, a regulated utility company and a renewable energy company. As the largest electric utility in the country, it continues to generate steady revenue and is also involved in renewable energy sources like solar and wind. The company aims to achieve earnings growth at the rate of 6% to 8% through 2026.
NextEra Energy has a solid history of rewarding shareholders with regular dividends and it pays an above average dividend of 47 cents quarterly for a 3.13% yield. NEE stock is trading at $59 today, and looking at the strong history and annual earnings growth rate, it looks like a good bet. It aims to achieve a 10% dividend growth through 2024 at least. Guggenheim analyst has a price target of $70 for the stock with a buy rating while Citigroup has initiated coverage on the stock with a buy.
Enterprise Products Partners (EDP)
Source: Casimiro PT / Shutterstock.com
You can take home significant passive income by investing in Enterprise Products Partners (NYSE:EPD). The company has a dividend yield of 7.6% and has been increasing the dividend payouts for the past 26 years consecutively. The North America-based company has an impressive portfolio of assets which helps maintain steady cash flow. It charges a fee from companies who use its assets and this helps it ensure steady revenue. The company has an extensive pipeline network and is not exposed to the volatility in oil and gas prices.
In its third quarter results, EDP saw an EPS of 61 cents, and revenue hit $12 billion. The revenue has dropped 22% year-over-year but it should not be alarming as the dip could be temporary. It can also be attributed to the high interest rates, and this decline could be factored in the stock price already. Exchanging hands for $26, EDP stock is very close to the 52-week high and is up 8% year to date. Since the company makes money when others use its assets, there is little risk of losing your money. It has long-term contracts and a strong cash flow position.
Enterprise Products has recently announced four new production projects in the Permian Basin which will help expand the natural gas liquid operations. Since the company’s liquidity position is strong, it can continue to invest in infrastructure and assets. It also has a low-debt balance sheet which works in its favor.
I strongly believe that the company is in a position to sustain the dividends in the coming years. Buy the stock before it soars and enjoy passive income for years to come.
Brookfield Renewable Partners (BEP)
Source: IgorGolovniov / Shutterstock
One of the largest companies in the energy space is Brookfield Renewable Partners (NYSE:BEP). It manages several renewable energy sources including solar, wind and hydroelectric. With over $800 billion in assets under management, Brookfield is one of the strongest players in the industry today. BEP stock is exchanging hands for $25 today and has lost 2% of its value year to date. While it isn’t much, the stock still looks undervalued to me. If you look at the financials, there are many reasons to bet on the stock. It saw a 7% year-over-year rise in revenue to hit $1.18 billion.
The stock enjoys a dividend yield of 5.35% which is impressive. The company is profitable and this means it will not have to worry about borrowing for operations. It is also a sign that it will be able to continue rewarding shareholders for the coming quarters. Its diverse portfolio and impressive capacity make it worth an investment. It is a powerhouse of mergers and acquisitions, and the management aims a 12% to 15% return by increasing the assets. If it can achieve this double-digit return, it could see the stock move upwards.
BEP stock will not be this cheap forever. It could soar higher in 2024, and holding this stock for passive income can be a smart choice. A strong balance sheet, impressive projects, and a stable dividend make it a buy.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.
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The post 3 of the Most Attractive Dividend Stocks in the Energy Space appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-13
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NEE
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It wasn't long ago that the stock of NextEra Energy Partners (NYSE: NEP) was trading near $50 per share. Shares then tumbled in late September after the partnership slashed its expectations for the growth rate of distributions to shareholders.
Now Mizuho analyst Anthony Crowdell thinks shares have plunged too far. This week, Crowdell cut his firm's price target from $40 to $33, but reiterated a buy rating. That's because that still represents more than 20% upside for the shares.
Growth rate cut in half
Prior to the late September update, NextEra Partners told investors it expected to grow distributions to shareholders at an annual rate of 12% to 15% through 2026. In the second quarter, it did in fact declare a distribution boost of about 12% compared to last year. But it surprised investors in September by announcing a revision saying it would now target just 6% annual growth through at least 2026.
You can blame interest rates for the change. NextEra Partners is a limited partnership that acquires and owns clean energy projects for its parent company, NextEra Energy. It pays out its funds from operations to shareholders as a distribution. So it taps the debt and equity markets for capital to support its growth. With interest rates at the highest level in more than a decade, more money needs to go to debt repayments.
A buy rating makes sense
The Mizuho analyst reacted to that change by slashing his price target to $40 from $86 when NextEra Partners announced the change in distribution growth expectations. This week's cut to $33 per share reflects the feeling among investors that interest rates will remain higher than what has been the norm for the past decade.
But individual investors can take advantage of that feeling. That's because while still higher than in the recent past, there is also an overwhelming expectation that the direction for rates will be down from here. Inflation slowed to an annual rate of 3.1% in November, and many market followers expect the Federal Reserve to begin cutting rates next year.
Don't lose track of the fact that the distribution wasn't cut -- only the growth rate was cut. That means now is the time to get into income-oriented investments like NextEra Energy Partners. It may not take much good news on the interest rate front to see the gain of 20% or so that Mizuho predicts.
Should you invest $1,000 in NextEra Energy Partners right now?
Before you buy stock in NextEra Energy Partners, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and NextEra Energy Partners wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 11, 2023
Howard Smith has positions in NextEra Energy. The Motley Fool has positions in and recommends NextEra Energy. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-12
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NEE
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
As we head into the new year, the one of the biggest trends on many investors’ minds is renewable energy.
The trillion-dollar renewable energy industry is worth a close inspection. Optimism prevails despite some recent downturns in renewable energy companies such as FirstSolar (NASDAQ:FSLR) and Plug Power (NASDAQ:PLUG).
Already, wind and solar energy is dipping to low costs of around $30 to $40 per MWh. In contrast, electricity holds at nearly $150 to $166 per MWh. With increasing Environmental, Social and Governance (ESG) friendliness concerns, countless renewable energy stocks are currently sitting at perfect discounts. Investors stand ready to scoop them up before the year ends.
Let’s explore three undervalued renewable energy stocks that all investors should have on their radar as heading into the holiday season.
General Electric Company (GE)
Source: Sundry Photography / Shutterstock.com
Multinational conglomerate General Electric Company (NYSE:GE) is widely known for its manufacturing and diversified technology and services. However, the business’s renewable energy division is cemented as a leader in green technology and innovation. Yahoo Finance analysts estimate that this stock will trade within a one-year price range of $74 – $131, with an average of $112.
GE will be at the forefront of renewable energy growth due to its strong presence in renewable grid solutions and offshore wind power. Currently, the business is facing a loss, as described in its Q3 earnings call. However, orders still increased by 20% despite the current conditions.
General Electric Company is presently trading at a P/E Ratio of 12.52x, far below the Renewable Industry’s P/E of 83.88x. It appears quite undervalued, compared to many of its peers in the green and renewable energy industry. Also, its 188% year over year (YOY) EPS growth rate indicates the stock is likely positioned to grow well going forward.
Southwestern Energy Company (SWN)
Source: Oil and Gas Photographer / Shutterstock.com
Southwestern Energy Company (NYSE:SWN) explores, and develops more sustainable ways to use natural gas, oil, and natural gas liquids. SWN has a five-year market cap growth rate of 178.86%. Yahoo Finance analysts estimate this stock will trade within a one-year price range of $5.00 to $15.00, with an average of $8.52.
Southwestern Energy Company has implemented innovative drilling techniques to increase its natural gas collection rate. In fact, it is decreasing costs by $690 million over the last year. True, this company may not be entirely focused on renewable energy sources. Yet, it is commited to being one of the lowest carbon-emitting natural gas companies. Also, SWN plans to preserve natural gas as a long-term, responsible energy solution. Further, they are collaborating with renewable energy companies.
The company is likely to be undervalued with a P/E ratio of 1.61x compared to the sector average of 4.47x. Southwestern has an EPS of 4.61, with an average EPS growth rate of 7.24% over the past few years. SWN increased its earnings significantly from $533 million to $5.1 billion over the past five years, an increase of 394.44%. Currently, it boasts an innovation score of 68, higher than the sector’s average of 58.
NextEra Energy Inc. (NEE)
Source: Khanthachai C / Shutterstock.com
NextEra Energy Inc. (NYSE:NEE) is one of North America’s largest providers of wind energy as well as solar. This gives it a unique advantage since it is involved in both production as well as distribution. Yahoo Finance analysts predict the stock will trade within a range of $44 to $103, with an average of $73.
NextEra Energy is deciding to sustain long-term growth. One of them is primarily being the reduction in its estimated partner distribution per unit growth to 6%, nearly half of what it announced previously. Now, it can sustain organic growth without pouring in extra capital. Due to an addition of 3.2 gigawatts of renewable energy to its backlog, all in Q3 alone, it looks promising.
Finally, NextEra Energy has impressive financials, with a P/E ratio of 15.75x, a fraction of the Renewable Industry’s P/E of 83.88x. Also, the company had a strong revenue growth of 38% this past year.
On the date of publication, Ian Hartana and Vayun Chugh did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chandler Capital is the work of Ian Hartana and Vayun Chugh. Ian Hartana and Vayun Chugh are both self-taught investors whose work has been featured in Seeking Alpha. Their research primarily revolves around GARP stocks with a long-term investment perspective encompassing diverse sectors such as technology, energy, and healthcare.
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The post The 3 Most Undervalued Renewable Energy Stocks to Buy in December appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-12
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NEE
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Below is Validea's guru fundamental report for NEXTERA ENERGY INC (NEE). Of the 22 guru strategies we follow, NEE rates highest using our Multi-Factor Investor model based on the published strategy of Pim van Vliet. This multi-factor model seeks low volatility stocks that also have strong momentum and high net payout yields.
NEXTERA ENERGY INC (NEE) is a large-cap growth stock in the Electric Utilities industry. The rating using this strategy is 50% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
MARKET CAP: PASS
STANDARD DEVIATION: PASS
TWELVE MINUS ONE MOMENTUM: NEUTRAL
NET PAYOUT YIELD: NEUTRAL
FINAL RANK: FAIL
Detailed Analysis of NEXTERA ENERGY INC
NEE Guru Analysis
NEE Fundamental Analysis
More Information on Pim van Vliet
Pim van Vliet Portfolio
About Pim van Vliet: In investing, you typically need to take more risk to get more return. There is one major exception to this in the factor investing world, though. Low volatility stocks have been proven to outperform their high volatility counterparts, and do so with less risk. Pim van Vliet is the head of Conservative Equities at Robeco Asset Management. His research into conservative factor investing led to the creation of this strategy and the publication of the book "High Returns From Low Risk: A Remarkable Stock Market Paradox". Van Vliet holds a PhD in Financial and Business Economics from Erasmus University Rotterdam.
Additional Research Links
Top NASDAQ 100 Stocks
Factor-Based ETF Portfolios
Harry Browne Permanent Portfolio
Ray Dalio All Weather Portfolio
High Shareholder Yield Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-11
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NEE
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Looking for broad exposure to the Utilities - Broad segment of the equity market? You should consider the Vanguard Utilities ETF (VPU), a passively managed exchange traded fund launched on 01/26/2004.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Utilities - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $4.75 billion, making it one of the largest ETFs attempting to match the performance of the Utilities - Broad segment of the equity market. VPU seeks to match the performance of the MSCI US Investable Market Utilities 25/50 Index before fees and expenses.
The MSCI US Investable Market Utilities 25/50 Index comprises of stocks of large, mid-size, and small U.S. companies within the utilities sector.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 3.41%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Utilities sector--about 99.80% of the portfolio.
Looking at individual holdings, Nextera Energy Inc. (NEE) accounts for about 13.39% of total assets, followed by Southern Co. (SO) and Duke Energy Corp. (DUK).
The top 10 holdings account for about 51.95% of total assets under management.
Performance and Risk
The ETF has lost about -8.43% so far this year and is down about -8.71% in the last one year (as of 12/11/2023). In that past 52-week period, it has traded between $121.65 and $158.16.
The ETF has a beta of 0.57 and standard deviation of 17.79% for the trailing three-year period, making it a medium risk choice in the space. With about 67 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Utilities ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, VPU is a reasonable option for those seeking exposure to the Utilities/Infrastructure ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Fidelity MSCI Utilities Index ETF (FUTY) tracks MSCI USA IMI Utilities Index and the Utilities Select Sector SPDR ETF (XLU) tracks Utilities Select Sector Index. Fidelity MSCI Utilities Index ETF has $1.36 billion in assets, Utilities Select Sector SPDR ETF has $14.08 billion. FUTY has an expense ratio of 0.08% and XLU charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Vanguard Utilities ETF (VPU): ETF Research Reports
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
Southern Company (The) (SO) : Free Stock Analysis Report
Duke Energy Corporation (DUK) : Free Stock Analysis Report
Utilities Select Sector SPDR ETF (XLU): ETF Research Reports
Fidelity MSCI Utilities Index ETF (FUTY): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-10
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NEE
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Below is Validea's guru fundamental report for NEXTERA ENERGY INC (NEE). Of the 22 guru strategies we follow, NEE rates highest using our Multi-Factor Investor model based on the published strategy of Pim van Vliet. This multi-factor model seeks low volatility stocks that also have strong momentum and high net payout yields.
NEXTERA ENERGY INC (NEE) is a large-cap growth stock in the Electric Utilities industry. The rating using this strategy is 50% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
MARKET CAP: PASS
STANDARD DEVIATION: PASS
TWELVE MINUS ONE MOMENTUM: NEUTRAL
NET PAYOUT YIELD: NEUTRAL
FINAL RANK: FAIL
Detailed Analysis of NEXTERA ENERGY INC
NEE Guru Analysis
NEE Fundamental Analysis
More Information on Pim van Vliet
Pim van Vliet Portfolio
About Pim van Vliet: In investing, you typically need to take more risk to get more return. There is one major exception to this in the factor investing world, though. Low volatility stocks have been proven to outperform their high volatility counterparts, and do so with less risk. Pim van Vliet is the head of Conservative Equities at Robeco Asset Management. His research into conservative factor investing led to the creation of this strategy and the publication of the book "High Returns From Low Risk: A Remarkable Stock Market Paradox". Van Vliet holds a PhD in Financial and Business Economics from Erasmus University Rotterdam.
Additional Research Links
Top NASDAQ 100 Stocks
Factor-Based ETF Portfolios
Harry Browne Permanent Portfolio
Ray Dalio All Weather Portfolio
High Shareholder Yield Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-10
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NEE
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Countries around the globe are trying to take the necessary steps to make our world a cleaner, and greener place. Leaders are talking about the impact of climate change. Several countries have laid out policies for the next decade. And while companies engaged in the energy sector didn’t have a good year they are ready for growth. Energy companies are significantly contributing towards the betterment of society. And now is the right time to boost your investment portfolio with these seven clean energy stocks for a cleaner and more profitable future.
Clean Energy Stocks: Li Auto (LI)
Source: Robert Way / Shutterstock.com
Electric vehicle makers are contributing towards building a cleaner and greener future. While the demand for EVs seems to have dropped, one company is firing on all cylinders. Li Auto (NASDAQ:LI) is one EV stock that is worth an addition to your portfolio and it will not disappoint.
The company has reported impressive delivery numbers throughout the year and ended the third quarter with 105,108 vehicle deliveries, a 296% year-over-year rise. Starting next year, the company will launch its fully electric vehicle which already has 10,000 pre-orders. This shows the popularity of Li Auto in China.
The company has strong financials and has managed to beat expectations in the past two quarters. Trading at $35 today, the stock is up 69% year to date but still below the 52-week high of $47. Li’s momentum shows no signs of slowing and this is one stock to buy and hold throughout 2024.
BYD Co. (BYDDF)
Source: shutterstock.com/Trygve Finkelsen
One of the biggest players in the Electric vehicle industry, BYD (OTCMKTS:BYDDF) is giving solid competition to Tesla (NASDAQ:TSLA) and it could beat Tesla’s delivery numbers in the coming months. The company has an extensive network and a global presence which ensures steady growth in delivery numbers. BYD Company is also the second largest battery maker in the world.
It has delivered 2,079,638 vehicles a year to date, which is a 43% increase from the previous year. Driven by the higher demand, the company’s profits also increased by 142% year over year in the first nine months of 2023. Its Thailand production unit will commence in 2024 and it also plans to build a new plant in Mexico.
BYD has its eyes set on theglobal marketand as the EV industry expands, there is a lot more to come. Exchanging hands for $27 today, the stock is highly undervalued right now.
Clean Energy Stocks: Enterprise Products Partners (EPD)
Source: Casimiro PT / Shutterstock.com
One big reason to invest in Enterprise Products Partners (NYSE:EPD) is its high dividend yield of 7.6%. Based in North America, this company has an impressive portfolio of assets that ensure steady cash flow and are considered to be highly reliable.
The company has managed to increase the dividend payouts for the past 25 years consecutively. It has a stable balance sheet with enough cash flow and is one of the biggest energy companies in the industry today. The company makes money by charging fees from the customers to use its assets and this ensures steady revenues.
I believe the company will be able to sustain the dividends in the coming years and you must buy the stock before it soars higher. It is exchanging hands for $26.25 today and is almost at the 52-week high, but this is one stock that will keep rewarding you.
NextEra Energy (NEE)
Source: IgorGolovniov/Shutterstock.com
The higher interest rates and concerns about funding are giving a tough time to NextEra Energy (NYSE:NEE), and while the stock is down, it is not out. It is a blend of both worlds- a utility company and a renewable energy company. It is the largest electric utility in the US and is involved in renewable energy sources like solar and wind.
The one reason it is a safe bet is its regulated business, Florida Power & Light which keeps generating steady income over the years, and it also has a significant portfolio of renewable assets. Trading at $59, the stock is down 28% year to date and is much lower than the 52-week high of $88. You can buy the stock near its three-year low right now.
This clean energy company has a long way to go and will keep rewarding you through steady dividends. It enjoys a dividend yield of 3.12% and the management expects to achieve 10% dividend growth through 2024.
Clean Energy Stocks: Enbridge (ENB)
Source: JHVEPhoto / Shutterstock.com
Enbridge (NYSE:ENB) is a no-brainer stock when it comes to green energy stocks. The energy company is based in North America and has recently shifted towards renewable energy. One solid reason to own the stock is the company’s steady dividend history. It has been paying dividends for the past 28 years and I do not think there will be any changes to this.
Earlier, the company was heavily dependent on oil and generated most of its revenue through oil pipelines, but it has diversified now. It currently generates revenue from clean energy and natural gas. Its financials are proof of the company’s strength. In the recent quarter, it saw a jump from $2.1 billion in cash flow to $3.1 billion year over year.
It shows that the company has enough liquidity to keep rewarding the shareholders. To expand its presence in the clean energy sector, the company is planning to purchase three natural gas utilities in 2024. Trading at $34 today, the stock is a big buy for the passive income.
SolarEdge Technologies (SEDG)
Source: rafapress / Shutterstock.com
The demand for solar energy has been on the rise and this gave a boost to SolarEdge Technologies (NASDAQ:SEDG). It provides inverters for residential and commercial properties and offers smart energy power optimizers that work for solar systems.
The company saw impressive growth earlier this year, but the earnings weren’t as impressive. It saw a 13% year-over-year drop in revenue due to the slowing demand in Europe. It also lost $61 million in the quarter due to the delay in European backlogs.
But I believe this could be temporary. The long-term demand for solar energy will remain high, and the stock is a buy and hold for patient investors. Exchanging hands at $80 today, the stock is down 71% year to date, and this dip is a good chance to buy. It is much lower than the 52-week high of $345, but its long-term potential is massive.
First Solar (FSLR)
Source: T. Schneider / Shutterstock.com
One of the early players and game changers in the solar industry segment is First Solar (NASDAQ:FSLR). It is one of the clean energy stocks with massive growth potential. While this year has been rough for the company, its total bookings backlog is proof that the company has enough orders to keep going.
The backlog of 81.8GW will last until 2030 and it also has opportunities for booking another 65.9GW. It plans to begin operations at the Louisiana and Alabama factories in the next two years. These facilities will increase production significantly and it could be reflected in the bottom line.
The company is also benefitting from the subsidiaries and it has a strong balance sheet. For the recent quarter, the net income came in at $2.50 and beat expectations. Trading at $144 today, down 25% in the past six months, the stock might look expensive but it is worth your money.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.
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The post Green Giants- 7 Must-Buy Stocks for a Cleaner (More Profitable) Future appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-10
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NEE
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
We are in the midst of an energy revolution. As the world transitions from carbon-intensive energy to renewable energy, industries will be disrupted and new, winners will be crowned. And the right investments will let any of us share in the winnings.
But the renewable revolution requires batteries — and lots of them. Oil, gas and coal succeeded because they pack an incredible amount of energy into an extremely efficient package. The energy liberated by breaking carbon bonds can power a piston, boiler or engine. And carbon-based energy is extremely easy to store and move from place to place. Batteries will need to be just as efficient if they are to replace carbon-based energies completely.
Not only that but batteries are needed to smooth out production and consumption. A solar panel and a wind turbine can produce a huge amount of energy. But you can’t stick a wind turbine on your car. And you can’t get solar power for half of the day. Without batteries, excess power is wasted, and nothing is available when it’s gone.
The governments of the world are pushing for renewable energy. And the markets are demanding cheaper energy, which can only come by replacing carbon with renewables. There’s never been a better time to invest in the battery stocks. So, here are the top battery stocks to buy right now.
Tesla (TSLA)
Source: Zigres / Shutterstock.com
Tesla’s (NASDAQ:TSLA) biggest advantage over other electric vehicle (EV) manufacturers has long been its battery technology. It has long shown the ability to make cheaper, longer-lasting batteries than anyone else in the industry. The company’s dominance continues today. It is not only a top EV company, its batteries are also available for the home market.
Tesla’s Powerwall is a line of home batteries intended for use alongside solar panels. The batteries continue to get high reviews, and the newest Powerwall 3 will be coming out soon in 2024. The great thing about Tesla’s batteries is they slot in well to every part of its business. Both home solar and EVs benefit from every improvement in battery technology.
And even if another startup does produce a better battery, Tesla has the free cash flow to buy them outright. That happened in 2021 when the company secretively acquired a Canadian startup to cut battery prices in half. And it happened in 2019 when Tesla acquired another Canadian battery company. If new batteries are developed in Canada, Tesla will be hunting them like a bloodhound.
Tesla continues to post better earnings than any other car or battery company in the world. Recently, the company’s costs have been rising faster than revenue. Still, its latest earnings report showed energy generation and storage revenue increasing by 40% year-on-year. The market for Tesla’s home batteries has plenty of room to run.
There are three reasons Tesla has revolutionized EVs and become one of the most valuable companies on Earth — batteries — batteries — batteries. Among the top battery stocks, TSLA stands high above the rest.
NextEra Energy (NEE)
Source: madamF / Shutterstock.com
NextEra Energy (NYSE:NEE) is a giant in the energy field. As the world’s largest generator of renewable energy, NextEra knows the key to renewables is storage. After all, what do you do when the sun isn’t shining and the wind isn’t blowing? Without storage, you have no choice but to turn back on a coal or gas source.
That’s why NextEra Energy is also the world’s largest energy storage company. Its installed battery capacity is head and shoulders above its competitors. In Q3 2023, it installed nearly as much storage as its nearest competitor had total capacity. With multiple major storage projects still ongoing, NextEra is becoming a key beneficiary of the battery revolution.
NextEra has not always had its own way this year. NEE stock dropped more than 28% year-to-date as the high-interest rate environment dampened growth. But it seems analysts underestimated it. NextEra beat estimates in Q3 2023, and CEO John Ketchum expects to continue beating them every year through 2026. That’s a big boast to make, but if he’s right, now is the best time to buy in.
As for those earnings, NextEra’s revenue grew faster than operating expenses. It is still growing on the right track, even while other expenses weigh the company down. And with more storage and renewable power coming online every year, NextEra is a top battery stock that should be on everyone’s watchlist.
QuantumScape (QS)
Source: JHVEPhoto / Shutterstock.com
QuantumScape (NYSE:QS) has had a wild ride in 2023. With precipitous ups and downs, its stock price is currently flat year-to-date. But the company could rocket up again if its solid-state EV batteries take hold.
Unlike other companies that use batteries as part of their core business, QuantumScape is a pre-revenue company developing the batteries of the future. It is working on solid-state batteries, promising higher energy density, lower cost and more safety. Higher energy density is also a cost-saver all on its own as it means a smaller, lighter battery. That, in turn, means the rest of the car can be smaller, lighter and cheaper.
The science behind QuantumScape’s batteries is sound. There is significant research showing the superiority of solid-state batteries over current lithium-ion batteries. But putting that research into practice will take time and money.
Speaking of money, a major contributor to QuantumScape’s stock remaining flat was the public offering announcement it made in August. Shareholder dilution will always cause such movement. But the move is worth it if it puts the company on a stronger footing.
QuantumScape’s most recent earnings report shows $1,100 million in cash and securities. With a net loss of $110 million, the company has roughly 2.5 years of runway. An investor should be cautious of dilution, as that money can go fast. But QuantumScape offers the best opportunity to invest in the batteries of tomorrow. Considering how revolutionary the batteries of today have been, QS is one of the best battery stocks to buy today.
On the date of publication, John Blankenhorn did not hold any positions (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
John Blankenhorn is a neuroscientist at Emory University. He has significant experience in biochemistry, biotechnology and pharmaceutical research.
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The post If You Can Only Buy One Battery Stock in December, It Better Be One of These 3 Names appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-09
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NEE
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
At the end of 2022, global wind power generation accounted for roughly 7.33% of electricity production. However, the currency expansion rates still fall critically short of putting major nations on track to meet 2050 net-zero emissions goals. Recognizing the gap, the International Energy Agency has urged doubling the rate of wind power growth in coming years. This situation creates an opportunity to buy wind stocks at discounted prices before faster industry growth kicks in.
Below, I’ve highlighted three wind stocks to buy. All three come with buy ratings (or better) from analysts and are poised to ride the accelerating shift to renewable wind energy. Let’s get started.
General Electric Company (GE)
Source: Sundry Photography / Shutterstock.com
General Electric Company (NYSE:GE) has been around for over 130 years. Headquartered in Boston, this American multinational conglomerate manufactures jet engines, wind turbines, and medical machines for various industries.
GE’s most recent report indicates orders are up 18% year-over-year, hitting $17.9 billion. Meanwhile, adjusted revenue is $16.5 billion, up 18% from last year. Additionally, the stock’s EPS reached $0.82, exceeding estimates by 46.43%.
General Electric announced in 2021 that it would split the company between aviation, healthcare, and energy. Looking ahead to 2024, the company’s energy segment, GE Vernova, will spin off from the parent company in Q2, listed as GEV on the New York Stock Exchange. This precedent was set by GE HealthCare Technologies Inc. (NASDAQ:GEHC) which split off earlier this year and trades well above its IPO.
Analysts are bullish on GE, setting a high target of $150 and issuing GE a strong buy rating.
NextEra Energy, Inc. (NEE)
Source: IgorGolovniov/Shutterstock.com
NextEra Energy, Inc. (NYSE:NEE) has become one of the world’s largest electric utility companies with over 58 gigawatts of power generation capacity. The company’s largest subsidiary is Florida Power & Light (FLP) which provides electricity to about 5.8 million customer accounts. However, most of NextEra’s rise is fueled by its fast-growing renewable energy business, NextEra Energy Resources (NEER) which focuses on global wind and solar power production.
NextEra also reported a solid third quarter. Impressively, NEE’s diverse portfolio generated over $20 billion in annual revenue last year. Total revenue was $7.17 billion with an EPS of $0.94, exceeding estimates by 9.3%. NEER had a remarkable 21% adjusted earnings surge, fueled by renewable energy investments. Adding 3,245 megawatts of renewable and storage to the backlog further emphasizes NEE’s commitment to sustainable energy.
With its 10.6% year-to-date adjusted EPS growth, a 3.19% dividend yield, and an estimated 64% upside potential based on analyst’s prediction of a $96 high, NEE could be an ideal investment. It’s no wonder analysts have been rating the company as a strong buy.
TPI Composite (TPIC)
Source: Khanthachai C / Shutterstock.com
TPI Composites (NASDAQ:TPIC) is a speculative pick for this list, since the company has manufactured turbine wind blades out of specialty materials since 2001. Headquartered in Scottsdale, Arizona, TPI operates factories globally and supplies over 38% of the international onshore wind market outside China. TPI predicts their wind blade production from 2018 to 2022 could reduce 1.7 billion metric tons of CO2 emissions globally.
In its Q3 report, the company reported a 3% decline in net sales to $373 million. This included a net loss of $72.8 million. Luckily, the loss was influenced by one-off events, including the Proterra bankruptcy and incremental warranty expenses. Their adjusted EBITDA shows the temporary setback, recording a loss of $27.4 million compared to the $5.1 million profit this quarter last year.
Despite these challenges, TPI actively addressed concerns through working capital initiatives, including the sale of a facility in China. These efforts have resulted in an unrestricted cash balance of $161 million.
Since the stock has taken quite the beating this year, this might be a good time to add TPIC to your portfolio. As I said, the loss was largely caused by the one-offs and seem to be in the past. And to be sure, analysts are still cautiously optimistic about the stock, issuing TPI a buy rating with a projected high price target of $8. This is far above the current price of around $2.48 per share. However, if you’re going to buy in, it might be best to keep the positions small until we have at least a few good quarters in the rear-view mirror.
As of the date of publication, Rick Orford did not have any positions (either directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.
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The post 3 Wind Stocks to Buy for a Sustainable and Profitable Future appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-08
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NEE
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Below is Validea's guru fundamental report for NEXTERA ENERGY INC (NEE). Of the 22 guru strategies we follow, NEE rates highest using our Multi-Factor Investor model based on the published strategy of Pim van Vliet. This multi-factor model seeks low volatility stocks that also have strong momentum and high net payout yields.
NEXTERA ENERGY INC (NEE) is a large-cap growth stock in the Electric Utilities industry. The rating using this strategy is 50% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
MARKET CAP: PASS
STANDARD DEVIATION: PASS
TWELVE MINUS ONE MOMENTUM: NEUTRAL
NET PAYOUT YIELD: NEUTRAL
FINAL RANK: FAIL
Detailed Analysis of NEXTERA ENERGY INC
NEE Guru Analysis
NEE Fundamental Analysis
More Information on Pim van Vliet
Pim van Vliet Portfolio
About Pim van Vliet: In investing, you typically need to take more risk to get more return. There is one major exception to this in the factor investing world, though. Low volatility stocks have been proven to outperform their high volatility counterparts, and do so with less risk. Pim van Vliet is the head of Conservative Equities at Robeco Asset Management. His research into conservative factor investing led to the creation of this strategy and the publication of the book "High Returns From Low Risk: A Remarkable Stock Market Paradox". Van Vliet holds a PhD in Financial and Business Economics from Erasmus University Rotterdam.
Additional Research Links
Top Large-Cap Growth Stocks
Factor-Based Stock Portfolios
Dividend Aristocrats 2023
High Insider Ownership Stocks
Top S&P 500 Stocks
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-08
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NEE
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Fintel reports that on December 8, 2023, Citigroup initiated coverage of NextEra Energy (NYSE:NEE) with a Buy recommendation.
Analyst Price Forecast Suggests 23.41% Upside
As of November 27, 2023, the average one-year price target for NextEra Energy is 73.86. The forecasts range from a low of 44.44 to a high of $107.94. The average price target represents an increase of 23.41% from its latest reported closing price of 59.85.
See our leaderboard of companies with the largest price target upside.
The projected annual revenue for NextEra Energy is 24,362MM, a decrease of 11.09%. The projected annual non-GAAP EPS is 3.11.
For more in-depth coverage of NextEra Energy, view the free, crowd-sourced company research report on Finpedia.
What is the Fund Sentiment?
There are 3493 funds or institutions reporting positions in NextEra Energy. This is a decrease of 22 owner(s) or 0.63% in the last quarter. Average portfolio weight of all funds dedicated to NEE is 0.62%, a decrease of 8.03%. Total shares owned by institutions increased in the last three months by 4.58% to 1,828,142K shares.
The put/call ratio of NEE is 0.73, indicating a bullish outlook.
What are Other Shareholders Doing?
Jpmorgan Chase holds 82,897K shares representing 4.04% ownership of the company. In it's prior filing, the firm reported owning 75,361K shares, representing an increase of 9.09%. The firm decreased its portfolio allocation in NEE by 88.94% over the last quarter.
VTSMX - Vanguard Total Stock Market Index Fund Investor Shares holds 63,881K shares representing 3.11% ownership of the company. In it's prior filing, the firm reported owning 63,103K shares, representing an increase of 1.22%. The firm decreased its portfolio allocation in NEE by 18.87% over the last quarter.
VFINX - Vanguard 500 Index Fund Investor Shares holds 48,629K shares representing 2.37% ownership of the company. In it's prior filing, the firm reported owning 48,175K shares, representing an increase of 0.93%. The firm decreased its portfolio allocation in NEE by 20.20% over the last quarter.
Bank Of America holds 44,248K shares representing 2.16% ownership of the company. In it's prior filing, the firm reported owning 41,386K shares, representing an increase of 6.47%. The firm decreased its portfolio allocation in NEE by 77.37% over the last quarter.
Geode Capital Management holds 37,484K shares representing 1.83% ownership of the company. In it's prior filing, the firm reported owning 36,671K shares, representing an increase of 2.17%. The firm decreased its portfolio allocation in NEE by 19.96% over the last quarter.
NextEra Energy Background Information
(This description is provided by the company.)
NextEra Energy, Inc. is a leading clean energy company headquartered in Juno Beach, Florida. NextEra Energy owns Florida Power & Light Company, which is the largest rate-regulated electric utility in the United States as measured by retail electricity produced and sold, and serves more than 5.6 million customer accounts, supporting more than 11 million residents across Florida with clean, reliable and affordable electricity. NextEra Energy also owns a competitive clean energy business, NextEra Energy Resources, LLC, which, together with its affiliated entities, is the world's largest generator of renewable energy from the wind and sun and a world leader in battery storage. Through its subsidiaries, NextEra Energy generates clean, emissions-free electricity from seven commercial nuclear power units in Florida, New Hampshire and Wisconsin. A Fortune 200 company and included in the S&P 100 index, NextEra Energy has been recognized often by third parties for its efforts in sustainability, corporate responsibility, ethics and compliance, and diversity. NextEra Energy is ranked No. 1 in the electric and gas utilities industry on Fortune's 2020 list of 'World's Most Admired Companies' and received the S&P Global Platts 2020 Energy Transition Award for leadership in environmental, social and governance.
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This story originally appeared on Fintel.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-07
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NEE
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NextEra Energy (NEE) closed the most recent trading day at $59.85, moving -0.58% from the previous trading session. The stock's change was less than the S&P 500's daily gain of 0.8%. On the other hand, the Dow registered a gain of 0.18%, and the technology-centric Nasdaq increased by 1.37%.
Coming into today, shares of the parent company of Florida Power & Light Co. Had gained 4.7% in the past month. In that same time, the Utilities sector gained 4.66%, while the S&P 500 gained 4.39%.
Investors will be eagerly watching for the performance of NextEra Energy in its upcoming earnings disclosure. On that day, NextEra Energy is projected to report earnings of $0.51 per share, which would represent no growth from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.17 billion, up 0.14% from the prior-year quarter.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $3.12 per share and a revenue of $27.52 billion, representing changes of +7.59% and +31.32%, respectively, from the prior year.
It's also important for investors to be aware of any recent modifications to analyst estimates for NextEra Energy. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, there's been a 0.05% rise in the Zacks Consensus EPS estimate. At present, NextEra Energy boasts a Zacks Rank of #3 (Hold).
Looking at valuation, NextEra Energy is presently trading at a Forward P/E ratio of 19.3. This valuation marks a premium compared to its industry's average Forward P/E of 16.28.
Investors should also note that NEE has a PEG ratio of 2.36 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. By the end of yesterday's trading, the Utility - Electric Power industry had an average PEG ratio of 2.86.
The Utility - Electric Power industry is part of the Utilities sector. This group has a Zacks Industry Rank of 55, putting it in the top 22% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-07
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NEE
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Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in Occidental Petroleum Corp (Symbol: OXY), where a total volume of 55,009 contracts has been traded thus far today, a contract volume which is representative of approximately 5.5 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 62.9% of OXY's average daily trading volume over the past month, of 8.7 million shares. Particularly high volume was seen for the $58 strike call option expiring December 08, 2023, with 5,467 contracts trading so far today, representing approximately 546,700 underlying shares of OXY. Below is a chart showing OXY's trailing twelve month trading history, with the $58 strike highlighted in orange:
Tyson Foods Inc (Symbol: TSN) saw options trading volume of 17,116 contracts, representing approximately 1.7 million underlying shares or approximately 56.8% of TSN's average daily trading volume over the past month, of 3.0 million shares. Especially high volume was seen for the $65 strike put option expiring January 19, 2024, with 3,500 contracts trading so far today, representing approximately 350,000 underlying shares of TSN. Below is a chart showing TSN's trailing twelve month trading history, with the $65 strike highlighted in orange:
And NextEra Energy Inc (Symbol: NEE) saw options trading volume of 61,981 contracts, representing approximately 6.2 million underlying shares or approximately 53.8% of NEE's average daily trading volume over the past month, of 11.5 million shares. Particularly high volume was seen for the $77.50 strike put option expiring January 19, 2024, with 21,120 contracts trading so far today, representing approximately 2.1 million underlying shares of NEE. Below is a chart showing NEE's trailing twelve month trading history, with the $77.50 strike highlighted in orange:
For the various different available expirations for OXY options, TSN options, or NEE options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-07
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NEE
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Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the The Utilities Select Sector SPDR Fund (Symbol: XLU) where we have detected an approximate $401.2 million dollar inflow -- that's a 2.9% increase week over week in outstanding units (from 215,220,000 to 221,520,000). Among the largest underlying components of XLU, in trading today NextEra Energy Inc (Symbol: NEE) is trading flat, Southern Company (Symbol: SO) is up about 0.2%, and Duke Energy Corp (Symbol: DUK) is up by about 0.5%. For a complete list of holdings, visit the XLU Holdings page » The chart below shows the one year price performance of XLU, versus its 200 day moving average:
Looking at the chart above, XLU's low point in its 52 week range is $54.77 per share, with $73.79 as the 52 week high point — that compares with a last trade of $63.79. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs had notable inflows »
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-07
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NEE
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Utilities are generally considered income stocks, so rising interest rates have been a headwind as they make other income options (like CDs) more attractive. If you are a long-term investor, however, this could be an opportunity to add some well-positioned utilities to your portfolio. Three that are worth considering this December are Duke Energy (NYSE: DUK), NextEra Energy (NYSE: NEE), and Black Hills (NYSE: BKH). Here's why.
Duke Energy is getting back to basics
Duke Energy is one of the largest regulated electric and natural gas utilities in the U.S., with a market cap of around $70 billion. It recently sold a contract renewable power business, which has left it with only regulated operations. This is a case of a utility getting even more boring, since regulated utilities have monopolies in the regions they serve but have to get capital investment plans and rates approved by the government. That generally results in slow but steady growth over time.
Today, Duke Energy has a capital investment budget of roughly $65 billion dollars. That money will be spent on things like new capacity and asset improvements (storm hardening, for example) over the next five years. This backs management's belief that it can provide earnings growth of between 5% and 7% a year through at least 2027. That, in turn, should support annual dividend increases that will extend the current 19-year annual dividend increase streak well into the future. With a dividend yield of 4.3%, even conservative dividend investors will probably want to dig into this story.
NextEra Energy is like two businesses in one
NextEra Energy is a dividend growth machine, with annual increases in each of the past 29 years and an annualized dividend growth rate of more than 10% a year over the past decade. That's incredibly fast dividend growth for a utility. The question for income-focused investors is how the company is managing to grow the dividend so quickly. The answer is by being two companies in one.
The core of NextEra Energy is Florida Power & Light, one of the largest regulated utilities in the U.S. Notably, it operates in a state that has seen a steady inflow of residents (and thus new customers) for years. That's the foundation on which NextEra Energy has built a clean energy business that is now one of the largest producers of solar and wind power on Earth.
The regulated utility (about 70% of the business) should continue to be a slow and steady performer, while the clean energy business (about 30%) should drive long-term growth. Notably, management expects this combination to support 6% to 8% earnings growth through 2026 with 10% dividend growth through at least 2024.
The current dividend yield of around 3.1% is near the high end of the range over the past decade, suggesting that now could be a great time to add this dividend growth stock to your portfolio.
Tiny Black Hills has a big streak
Duke has increased its dividend for 19 years. NextEra's dividend has grown annually for 29 years. And Black Hills is a Dividend King, with over 50 consecutive annual dividend increases. While NextEra is an industry giant with a $120 billion market cap, its dividend record is easily bested by Black Hills, which has a $3.6 billion market cap.
That said, Black Hills, like Duke, is essentially just a boring regulated utility, so dividend growth (roughly 5% a year over the trailing one-, three-, five-, and 10-year periods) isn't as robust as industry giant NextEra and probably never will be.
However, for investors interested in a reliable dividend, 5% annual dividend growth should be more than enough to keep them happy. Right now Black Hills' yield is 4.6%, which is toward the high end of the yield range over the past 10 years. That could make now a good time to add this reliable dividend payer to your income portfolio.
But investors should go in knowing that leverage is a bit high today, leading management to pull back on capital investment plans in 2023 in favor of debt reduction. That could limit growth for a bit, though the company has plans to increase spending again in the coming years.
Boring, but attractively priced
Duke Energy is 12% below its 52-week high. Black Hills is off its 12-month high by 27%. And NextEra is lower by 32%. If you are looking for an opportunity to add reliable dividend stocks to your portfolio, now is the time to consider these utilities. Duke is the most boring, NextEra the most exciting (particularly for dividend growth investors), and Black Hills is the under-the-radar pick. But if you can stomach buying while others are selling, all three appear attractively priced today.
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Reuben Gregg Brewer has positions in Black Hills. The Motley Fool has positions in and recommends NextEra Energy. The Motley Fool recommends Duke Energy. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-06
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NEE
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NextEra Energy Partners (NYSE: NEP) is closing in on the funding needed to refinance its debt due early next year, and markets are applauding the added certainty. Shares of NextEra Energy Partners were up 5% as of 11 a.m. ET, and shares of parent NextEra Energy (NYSE: NEE) were up nearly 3%, on the deal and positive commentary from one Wall Street analyst.
2024 comes into focus
It has been a tough year for holders of NextEra Energy Partners. The company, a master limited partnership (MLP), or yieldco, is highly reliant on debt to fund its business model. Higher rates have eaten into profitability, causing a midyear profit warning that caused the stock to fall about 75% from its all-time highs and down 60% in 2023.
NextEra Energy, its electric utility parent, has done better but is also down about 30% for the year. One of the key questions lingering over NextEra Energy Partners is whether its dividend is sustainable as some of its loans come up for refinancing.
On Tuesday, NEP priced a private offering of $750 million in unsecured notes at 7.25%. The net proceeds will be used to repay 4.25% senior notes due in July and September 2024 as well as borrowings outstanding under NextEra Energy Partners' revolving credit facility. The borrowing rate is a bit higher than what Wall Street had expected, but the markets appear to be cheering the added clarity about how NEP will deal with its debt.
Both companies also got a positive mention from Guggenheim. The investment bank raised its price target on NextEra Energy to $70 from $65 and reiterated its buy rating, saying the company's Florida utility remains "an underappreciated growth vehicle." The bank lowered its price target on NEP to $37, from $42, but kept a buy rating on the shares.
Down big in 2023, are NextEra Energy and NEP buys?
These two companies have similar names and a shared heritage, but investors should consider them separately. Of the two, NextEra Energy appears the safer bet thanks to its regulated utility business and its significant portfolio of renewable energy assets. NextEra Energy could require some patience, but investors buying in today are likely to be glad they did in the years to come.
NextEra Energy Partners is a bit more of a wild card. Its current 13% dividend yield looks enticing, but the yield is high in part because Wall Street is betting the current dividend is unsustainable. Management is trying to prove naysayers wrong, but investors seeking income should be aware that even after the private offering of notes, NEP still has a rocky path ahead.
NextEra Energy has a relatively modest yield by comparison, paying just 3% right now. But given its better risk profile, it is the better stock to buy right now for those looking to add to their energy exposure.
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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends NextEra Energy. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-06
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NEE
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Below is Validea's guru fundamental report for NEXTERA ENERGY INC (NEE). Of the 22 guru strategies we follow, NEE rates highest using our Multi-Factor Investor model based on the published strategy of Pim van Vliet. This multi-factor model seeks low volatility stocks that also have strong momentum and high net payout yields.
NEXTERA ENERGY INC (NEE) is a large-cap growth stock in the Electric Utilities industry. The rating using this strategy is 50% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
MARKET CAP: PASS
STANDARD DEVIATION: PASS
TWELVE MINUS ONE MOMENTUM: NEUTRAL
NET PAYOUT YIELD: NEUTRAL
FINAL RANK: FAIL
Detailed Analysis of NEXTERA ENERGY INC
NEE Guru Analysis
NEE Fundamental Analysis
More Information on Pim van Vliet
Pim van Vliet Portfolio
About Pim van Vliet: In investing, you typically need to take more risk to get more return. There is one major exception to this in the factor investing world, though. Low volatility stocks have been proven to outperform their high volatility counterparts, and do so with less risk. Pim van Vliet is the head of Conservative Equities at Robeco Asset Management. His research into conservative factor investing led to the creation of this strategy and the publication of the book "High Returns From Low Risk: A Remarkable Stock Market Paradox". Van Vliet holds a PhD in Financial and Business Economics from Erasmus University Rotterdam.
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About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-06
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NEE
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Who needs a theme park when you have Wall Street? Since the start of the decade, the three major stock indexes have navigated two separate bull and bear markets.
Although 2023 has featured a sizable rally for Wall Street, the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite remain below their all-time closing highs. For long-term investors, it means opportunities still abound to snatch up high-quality companies at a discount.
Image source: Getty Images.
One of the best aspects of putting your money to work on Wall Street is that it's easier than ever for retail investors to get started or continue on their path to financial independence. Most online brokerages have completely done away with commission fees for trades on major U.S. exchanges, as well as minimum deposit requirements. This means any amount of money -- even $300 -- can represent the perfect amount to invest.
If you have $300 that's ready to invest, and you're 100% certain this cash won't be needed to pay bills or cover emergency expenses, the following three stocks stand out as no-brainer buys right now.
NextEra Energy
The first magnificent stock to add to your portfolio right now with $300 is none other than electric utility NextEra Energy (NYSE: NEE).
After two decades of virtually uninterrupted gains, NextEra's stock has hit the skids in 2023, with higher interest rates and a big uptick in Treasury yields to blame. Higher interest rates will make future projects financed by debt costlier.
Meanwhile, Treasury bonds are virtually risk-free investments offering yields of around 5% at the moment. Most investors flock to utility stocks for their low volatility and market-topping yields. However, investors have been able to net similar yields, with practically no risk to their principal, from Treasury bonds, which has made industry leaders like NextEra Energy less popular among income seekers.
However, NextEra Energy is an industry leader for a reason. Its competitive advantage is its renewable energy portfolio. As of the end of September, NextEra had 34 gigawatts (GW) of clean-energy capacity in operation, including 23 GW of wind capacity and 6 GW of solar capacity. Both figures are high-water marks globally.
Though undertaking clean-energy projects has been costly, it's benefited NextEra's bottom line in a big way. Electricity generation costs have tumbled, leading to a compound annual adjusted earnings growth rate of just shy of 10% over the previous 10 years. By comparison, most electric utilities are growing their earnings per share by a low-single-digit percentage on an annualized basis.
In addition to its world-leading renewables segment, NextEra's traditional utility operations are regulated. In other words, it can't raise rates on its customers without the approval of state-level utility commissions (i.e., the Florida Public Service Commission). While this might sound like a nuisance, it's actually a benefit in disguise. Regulated utilities avoid wholesale pricing, which makes their operating cash flow highly predictable.
Lastly, NextEra Energy is historically inexpensive. Shares are currently trading at 17 times forward-year earnings, which is the cheapest they've been since 2015.
Lovesac
A second no-brainer stock to buy with $300 right now is small-cap furniture retailer Lovesac (NASDAQ: LOVE).
Like most growth stocks, Lovesac was clobbered during the 2022 bear market. Fears of a potential U.S. recession clearly have investors concerned. If economic growth stalls or reverses, it's expected that consumers will pare back their discretionary spending in a highly cyclical industry (furniture).
But what's interesting about Lovesac is that it's nothing like traditional furniture retailers. This is a company that's completely differentiating itself with its products and omnichannel sales presence.
Lovesac's primary means of standing out from the rest of the pack is its furniture. While originally known for its beanbag-style chairs called "sacs," approximately 90% of net sales now derive from modular couches known as "sactionals." Sactionals can be rearranged dozens of ways to fit most living spaces, and they come with over 200 different cover choices and a multitude of upgrade options (e.g., built-in surround sound). Best of all, the yarn used in these covers is made entirely from recycled plastic water bottles. This makes sactionals unique in their functionality, optionality, and eco-friendliness.
As you can probably guess from these options, sactionals are pricier than traditional sofas and sectional couches. But that's just fine with Lovesac. The company predominantly targets middle- to upper-income clientele with its products. The advantage of this approach is that high-earners are less likely to alter their spending habits during periods of economic instability. In short, it leads to predictable sales and cash flow for Lovesac.
The other differentiating factor with Lovesac is its omnichannel sales platform. While it does have a physical store presence in most U.S. states, it was able to shift a significant percentage of its sales online during the COVID-19 pandemic.
Additionally, it operates popup showrooms and has partnerships with a couple of brand-name businesses -- Best Buy and Costco Wholesale. These alternative channels are improving brand awareness and, most importantly, keeping overhead costs low. The end result should be a consistently higher operating margin than its peers.
Sporting a long-term double-digit growth rate and a forward price-to-earnings ratio below 10, Lovesac is a screaming buy.
Image source: Getty Images.
Alibaba
The third no-brainer stock that's begging to be bought with $300 right now is China-based e-commerce company Alibaba (NYSE: BABA).
Perhaps the biggest thorn in Alibaba's side has been the tightening oversight of Chinese regulators. In 2021, the company was hit with a record fine of $2.75 billion by regulators for its anti-monopoly practices. Alibaba is the leading online marketplace in China. If regulators continue to tighten their grip, its growth rate could be adversely impacted.
Alibaba is also dealing with the recent departure of Daniel Zhang. Zhang was Alibaba's CEO for eight years, and he'd recently stepped down from the CEO role to head the company's burgeoning cloud services division. Investors are visibly concerned about the direction of the company with its key figurehead of nearly a decade no longer there.
Despite these challenges, there are a few reasons for investors to be increasingly optimistic about Alibaba's future.
To begin with, it absolutely dominates the e-commerce arena in China. Based on data from the International Trade Administration, Alibaba's online shopping sites Taobao and Tmall accounted for almost 51% of e-commerce market share in the world's No. 2 economy by gross domestic product. Considering that China's economy is still bouncing back from three years of supply chain constraints during the COVID-19 pandemic, there's reason to believe e-commerce has a lengthy upward trajectory.
Another reason for investors to be excited for Alibaba's future is its cloud services segment. Estimates from tech-analysis company Canalys from the March-ended quarter show Alibaba accounts for 34% of cloud infrastructure service spending in China. That's nearly double its next-closest competitor. Enterprise cloud spending is still in its early stages, which suggests there's a sustained double-digit growth opportunity for the company to take advantage of.
Alibaba wouldn't make the list of no-brainer buys if it wasn't also historically inexpensive. Even factoring in the added regulatory risks of putting your money to work in China, Alibaba is jaw-droppingly cheap at roughly 7 times forward-year earnings.
10 stocks we like better than NextEra Energy
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They just revealed what they believe are the ten best stocks for investors to buy right now... and NextEra Energy wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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Sean Williams has positions in Lovesac and NextEra Energy. The Motley Fool has positions in and recommends Best Buy, Costco Wholesale, and NextEra Energy. The Motley Fool recommends Alibaba Group and Lovesac. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-05
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NEE
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Before buying the dip on NextEra Energy (NYSE: NEE) or subsidiary NextEra Energy Partners (NYSE: NEP), Motley Fool contributors Jason Hall and Tyler Crowe think investors should take a look at Clearway Energy (NYSE: CWEN)(NYSE: CWEN.A) and Allete (NYSE: ALE), an independent power producer and Midwestern utility that could yield greater returns.
*Stock prices used were from the morning of Nov. 28, 2023. The video was published on Dec. 2023.
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They just revealed what they believe are the ten best stocks for investors to buy right now... and NextEra Energy wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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Jason Hall has positions in Clearway Energy and NextEra Energy Partners. Tyler Crowe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends NextEra Energy. The Motley Fool has a disclosure policy. Jason Hall is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-04
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NEE
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Below is Validea's guru fundamental report for NEXTERA ENERGY INC (NEE). Of the 22 guru strategies we follow, NEE rates highest using our Shareholder Yield Investor model based on the published strategy of Meb Faber. This strategy looks for companies returning cash to shareholders via dividends, buybacks and debt paydown.
NEXTERA ENERGY INC (NEE) is a large-cap growth stock in the Electric Utilities industry. The rating using this strategy is 55% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
UNIVERSE: PASS
NET PAYOUT YIELD: FAIL
QUALITY AND DEBT: PASS
VALUATION: PASS
RELATIVE STRENGTH: PASS
SHAREHOLDER YIELD: FAIL
Detailed Analysis of NEXTERA ENERGY INC
NEE Guru Analysis
NEE Fundamental Analysis
More Information on Meb Faber
Meb Faber Portfolio
About Meb Faber: Meb Faber is the founder of Cambria Investments. His research has covered a wide spectrum of the investment world, including topics like shareholder yield, trend following, global asset allocation and home country bias. His shareholder yield strategy, which is based on his book "Shareholder Yield" and forms the basis for an ETF of the same name, looks for companies that are focused on creating value for shareholders by returning cash to them in the form of dividends, share buybacks and debt paydown. Meb is also the author of 4 other books and numerous white papers on investing related topics.
Additional Research Links
Top Large-Cap Growth Stocks
Factor-Based Stock Portfolios
Dividend Aristocrats 2023
High Insider Ownership Stocks
Top S&P 500 Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-03
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NEE
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Energy stocks have woefully underperformed this year. While the S&P 500 is up more than 19%, the energy stocks in that index are down by an average of 2%.
That underperformance has many energy stocks looking like relatively compelling investment opportunities these days. Enterprise Products Partners (NYSE: EPD), Kinder Morgan (NYSE: KMI), and NextEra Energy (NYSE: NEE) stand out to a few Fool.com contributors as the top ones to buy this December. Here's why they think investors should scoop up shares this month.
If you like passive income, Enterprise has you well covered
Reuben Gregg Brewer (Enterprise Products Partners): If there's one thing that gets a dividend investor's blood pumping, it's a fat yield, like the 7.5% yield on offer from Enterprise Products Partners. The only thing investors need to be careful about when looking at mouthwatering yields like that is whether they're sustainable. Enterprise's yield is very well covered.
For starters, the North American midstream giant operates a portfolio of energy infrastructure assets that would be virtually impossible to replace or replicate. Those assets are mostly fee driven as well, so the cash flows they produce are highly reliable despite the inherent volatility of oil and natural gas prices. This is why master limited partnership (MLP) Enterprise has managed to increase its distribution annually for 25 consecutive years.
But the real strength of the distribution shows up in two other ways. First, Enterprise's balance sheet is investment grade-rated. In other words, it's financially strong. Second, its distributable cash flows cover the distribution 1.7 times over. That leaves a huge amount of room for adversity before the distribution would be at risk. And even then, Enterprise could lean on its balance sheet for a little while to support the payment if it had to. There's no telling how long Enterprise's yield will be as lofty as 7.5%, so investors looking for a reliable income option should probably act sooner rather than later -- before the rest of Wall Street catches on to the story.
Flexing its flexibility
Matt DiLallo (Kinder Morgan): Kinder Morgan has spent several years shoring up its balance sheet. The natural gas pipeline giant has sold assets and used excess cash flow to reduce its debt. It has cut its debt by more than $11 billion since 2015, reducing its leverage ratio by 23%. It's on track to end this year with a leverage ratio of 4.0, well below its long-term target of 4.5.
That has given the company lots of financial flexibility. It recently found an opportunity to put some of its financial capacity to work. It agreed to buy STX Midstream from NextEra Energy Partners in a $1.8 billion deal. Kinder Morgan capitalized on the opportunity to buy a high-quality natural gas pipeline business from NextEra Energy Partners, which needs cash to redeem some maturing financing. It's getting a good deal on a highly strategic asset.
The company expects STX Midstream to be accretive to its cash flow per share. Meanwhile, it's only using a fraction of its financial capacity since the acquisition will increase its leverage ratio by 0.1 times in the near term. So it still has ample financial flexibility to make additional deals.
Kinder Morgan should also benefit from a growing slate of high-return expansion projects. It ended the third quarter with $3.8 billion of expansions under construction that should come online over the next few years. They'll supply the company with incremental income as they enter service.
Those two growth drivers should increase the company's cash flow. That will give it more money to pay dividends. Kinder Morgan has given its investors a raise for six straight years and currently offers a 6.4%-yielding payout. That combination of income and growth puts Kinder Morgan in a solid position to produce attractive total returns in 2024 and beyond.
Time to get greedy
Neha Chamaria (NextEra Energy): After plunging dramatically toward the end of September, shares of NextEra Energy have regained some ground in recent weeks. I expect the stock to maintain its momentum and believe it's a solid buy this month. That's because NextEra Energy has its growth plans in place, and some of the fears about the company appear unwarranted.
NextEra Energy stock slumped after its majority-owned limited partnership company, NextEra Energy Partners, slashed its dividend growth goal through 2026 in the wake of higher interest rates that made funding for growth difficult. Investors feared two things: NextEra Energy could be next in line to cut its growth forecast, and lower income in the form of dividends from the limited partnership could hit its bottom line.
During its most recent earnings release, though, NextEra Energy said it was confident of growing its adjusted earnings per share (EPS) by 6% to 8% through 2026 off its 2024 estimate and expects to increase its dividend annually by around 10% at least through 2024. Management even stated it would be "disappointed" if the company didn't grow at the higher end of its range through 2026. NextEra Energy expects its planned investments in its utility, Florida Power & Light (FPL), and renewable energy to drive growth. While FPL expects to invest up to $34 billion between 2022 and 2025, NextEra Energy's clean energy arm already has a humongous backlog of over 21 gigawatts.
For a company that's still growing its cash flows and dividends steadily and prioritizes a healthy balance sheet, NextEra Energy looks like the kind of company that should not only be able to navigate challenging times but also reward shareholders along the way. With the utility stock now languishing at three-year lows and yielding 3.2%, it makes for a solid long-term buy now.
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Matthew DiLallo has positions in Enterprise Products Partners, Kinder Morgan, NextEra Energy, and NextEra Energy Partners. The Motley Fool has positions in and recommends Kinder Morgan and NextEra Energy. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-03
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NEE
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2023 has nearly come and gone. But before turning your calendar to the new year, it's worth considering top stocks that could be great buying opportunities.
The end of the year is the perfect time to reflect on your financial goals, see where your portfolio has been and where you want it to go, and align your risk tolerance with your investments.
NextEra Energy (NYSE: NEE), Brookfield Renewable (NYSE: BEP) (NYSE: BEPC) Garmin (NYSE: GRMN), Confluent (NASDAQ: CFLT), and Chevron (NYSE: CVX) are five completely different but worthy stocks that may help you reach your goals. Here's why each stock is worth buying in December.
Image source: Getty Images.
This top dividend growth stock is now cheap
Neha Chamaria (NextEra Energy): With the utility sector taking a hit in the wake of higher interest rates, shares of the largest electric utility in the U.S., NextEra Energy, have slumped to levels last seen in 2020. The steep fall has driven NextEra Energy's dividend yield north of 3%. The stock now trades substantially below five-year averages for nearly every important valuation metric, including price-to-earnings, price-to-cash flow, and price-to-book ratio. I believe it's a compelling opportunity to buy the stock, given NextEra Energy's foothold in the industry, growth plans, and strong financials.
At its recent earnings conference call, NextEra Energy expressed confidence in its ability to grow in the years to come, driven by its two electric utility and renewable energy businesses. Florida Power & Light is the U.S.'s largest utility and expects to invest $32 billion to $34 billion in infrastructure, including solar, between 2022 and 2025.
Meanwhile, NextEra Energy believes its clean energy arm, Energy Resources, is just getting started. Energy Resources is already the world's leading producer of energy from wind and solar, with nearly 34 gigawatts (GW) in operation and more than 21 GW in backlog.
Driven by its investments in utility and renewable energy, NextEra Energy is confident of growing its adjusted earnings per share (EPS) by 6% to 8% annually through 2026. It also expects to increase its dividend by 10% through next year, at least for now.
Some investors fear NextEra Energy will cut down its dividend growth pace after a similar recent move by its limited partnership, NextEra Energy Partners (NYSE: NEP). I still believe a double-digit dividend raise in 2024 is feasible. NextEra Energy's cash flows are growing steadily, and it doesn't expect any effect on its adjusted EPS in 2023 and 2024 if interest rates rise by another 50 basis points. The company's balance sheet is in good shape, and I think this alone could play a huge role in helping NextEra Energy navigate any storm.
Too great an opportunity to ignore
Keith Speights (Brookfield Renewable): It hasn't been a fantastic year for Brookfield Renewable. Shares of the renewable energy provider are in negative territory with 2023 winding down, even as the major market indexes have delivered solid gains. However, I think that Brookfield Renewable presents too great an opportunity for investors to ignore.
The company expects to generate average annual total returns of between 12% and 15% over the long term. At the low end of that range, an investment will roughly double every six years. I suspect that most investors would be quite happy with that kind of performance.
Of course, setting a target is different than actually achieving it. But I'm confident that Brookfield Renewable will be able to do what it says it will do. In my view, the company probably has the clearest path to delivering double-digit total returns, compared to any other on the market.
It's abundantly evident that the demand for renewable energy sources -- especially onshore wind and solar -- will continue to increase significantly. There's simply no way that countries and major corporations around the world will be able to reach their carbon reduction goals without a lot more renewable energy.
Brookfield Renewable is in a great position to help meet this rising demand. Its operational capacity currently totals around 31.5 gigawatts. The company's development pipeline is more than 4.5 times that capacity. CEO Connor Teskey noted in Brookfield Renewable's third-quarter earnings conference call that the company continues to see plenty of attractive acquisition opportunities.
I especially like Brookfield Renewable's distribution yield of over 5%. The company plans to increase its distribution by 5% to 9% per year. With this strong distribution and exceptional growth prospects, this stock looks like a no-brainer to buy in December.
Navigate toward higher returns
Demitri Kalogeropoulos (Garmin): There's a lot to love about Garmin stock right now. Sure, the tech hardware giant went through a rough sales period following the pandemic. Revenue declined 6% last year following a 19% surge in 2021. That marked the first time in seven years that Garmin hasn't steadily boosted its sales.
The tech company is thankfully returning to its more usual, and impressive, expansion pace right now. Sales were up 12% last quarter, and operating profit landed at a robust 21% of sales. Garmin's management team took the opportunity to raise their 2023 outlook, saying in early November that sales should rise by about 5% this year to $5.2 billion.
I like Garmin for its diverse portfolio that spans consumer-focused devices like smart watches and fitness trackers, but also higher-priced products like marine and aviation navigation platforms. The company has demonstrated a knack for innovating across these varied segments, and the payoff has been rising sales and market-beating profitability over the years.
It's true that the stock jumped in response to the good news that investors have seen in Garmin's results this year. But there's still room to enjoy solid returns by holding shares over the long term. At below 5 times annual sales, Garmin's price-to-sales valuation is still far less than the pandemic peak of close to 7 times sales. But the business looks very strong as it aims to conclude another year of sales growth and profit expansion in 2023. Toss in a modest dividend payment, and Garmin should help investors find their way to market-thumping returns.
Confluent: The unsung hero of secure data messaging
Anders Bylund (Confluent): When I talk about streaming services, the conversation usually centers on media streaming experts such as Netflix (NASDAQ: NFLX). These innovators turned the entertainment world upside down over the last decade or so, and digital streaming is the default method of video and music delivery for many people in 2023.
Confluent runs a streaming service too, but a very different one.The Confluent Kafka suite is a system that carries any kind of data from a publishing hub to any number of delivery endpoints. The actual stream can be anything, including plain text, digital video, or raw binary data. Businesses use it to manage everything from log files and real-time sensor readings to remote backups and ultra-secure data transfers.
This reliable connectivity plays a central role in the Internet of Things and Web3 revolutions, shepherding the right data to the right destination -- millions or even billions of times per second. For classical Unix nerds like myself, you can think of Kafka as a modernized version of MQ (formerly MQSeries).
This stock is a fairly fresh face, entering the public market as recently as 2021. However, the company has been around since 2014, when three original inventors of the open-source Apache Kafka system wanted to commercialize their powerful messaging solution. A decade later, Confluent provides enterprise-ready features in addition to the basic Apache Kafka solution, selling software subscriptions and technical support services.
The business is absolutely humming, as you'd expect from a cornerstone of several next-generation technology trends. Revenues rose 32% year over year in the recently reported third quarter of 2023. The quarter was profitable on an adjusted basis, exceeding Wall Street's consensus estimates across the board. That's business as usual, apart from the newfound profitability. Confluent has a firm history of beating expectations and delivering robust growth.
And don't forget about the media-streaming giants -- as it turns out, Netflix relies on Kafka to manage its content production spending, real-time viewing data, and financial forecasting. Yes, that's a diverse grab bag of data streams, highlighting just how flexible Kafka is. This little technology is going places.
Yet, that surprising Q3 report triggered another sharp sell-off. Confluent's stock price plunged 42% lower the next day due to modest guidance for the next reporting period. Fourth-quarter sales were aimed at a 21% year-over-year increase along with continued bottom-line profits. But the top-line reading was below the average analyst projection at the time, and that was enough to inspire that dreadful price cut.
Well, the lower share price is dreadful only if you own Confluent already and were planning to sell the stock someday soon. Otherwise, I see a fantastic buying opportunity here. The original founders still run the company, preserving Confluent's spirit of innovation and personal C-suite commitment to the company's success. This is a high-powered growth story addressing several important secular trends at once, with tremendous business growth to boot.
Take advantage of the sell-off in Chevron
Daniel Foelber (Chevron): Chevron more than doubled between the beginning of 2021 and the end of 2022. But this year hasn't been as kind to the energy giant. Chevron is down 20% year to date and is hovering around a 52-week low.
The sell-off makes sense to some degree considering the stock's epic run-up leading into this year and the fact that oil prices have cooled off. But there's reason to believe Chevron is undervalued now.
Big tech companies use their gobs of free cash flow to buy back stock and invest in growth, which allows them to take market share regardless of the market cycle. Chevron does the same thing, just with a degree of caution that's valued in the highly cyclical oil and gas industry.
For example, Chevron continued to pay and raise its dividend even during the brutal oil and gas downturn of 2020, while also making some small but brilliant acquisitions in hindsight when so much of the industry was barely getting by.
Today, Chevron has been able to flex its high profits and financial muscle to buy back a boatload of stock, and make its largest acquisition in over 20 years.
Chevron has geographic exposure and diversification throughout the oil and gas value chain. It also has an incredibly strong balance sheet that was successfully stress-tested in 2020. It has paid and raised its dividend for 36 consecutive years and is probably going to announce another dividend raise in January. For now, the forward yield is 4.2%.
Finally, Chevron stock is still cheap, sporting a price-to-earnings ratio of just 10.7.
Add it all up, and there's a lot to like about Chevron stock this December.
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Anders Bylund has positions in Netflix. Daniel Foelber has no position in any of the stocks mentioned. Demitri Kalogeropoulos has positions in Netflix. Keith Speights has positions in Brookfield Renewable and Brookfield Renewable Partners. Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Brookfield Renewable, Confluent, Garmin, Netflix, and NextEra Energy. The Motley Fool recommends Brookfield Renewable Partners and Chevron. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-02
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NEE
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Below is Validea's guru fundamental report for NEXTERA ENERGY INC (NEE). Of the 22 guru strategies we follow, NEE rates highest using our Shareholder Yield Investor model based on the published strategy of Meb Faber. This strategy looks for companies returning cash to shareholders via dividends, buybacks and debt paydown.
NEXTERA ENERGY INC (NEE) is a large-cap growth stock in the Electric Utilities industry. The rating using this strategy is 55% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
UNIVERSE: PASS
NET PAYOUT YIELD: FAIL
QUALITY AND DEBT: PASS
VALUATION: PASS
RELATIVE STRENGTH: PASS
SHAREHOLDER YIELD: FAIL
Detailed Analysis of NEXTERA ENERGY INC
NEE Guru Analysis
NEE Fundamental Analysis
More Information on Meb Faber
Meb Faber Portfolio
About Meb Faber: Meb Faber is the founder of Cambria Investments. His research has covered a wide spectrum of the investment world, including topics like shareholder yield, trend following, global asset allocation and home country bias. His shareholder yield strategy, which is based on his book "Shareholder Yield" and forms the basis for an ETF of the same name, looks for companies that are focused on creating value for shareholders by returning cash to them in the form of dividends, share buybacks and debt paydown. Meb is also the author of 4 other books and numerous white papers on investing related topics.
Additional Research Links
Top NASDAQ 100 Stocks
Factor-Based ETF Portfolios
Harry Browne Permanent Portfolio
Ray Dalio All Weather Portfolio
High Shareholder Yield Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-01
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NEE
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With interest rates on the rise, investors have been shifting away from income stocks and toward safer alternatives like CDs. That's opening up an opportunity for investors in the utility sector, which has been down and out of late. Near 52-week lows, Black Hills Corporation (NYSE: BKH), NextEra Energy (NYSE: NEE), and Duke Energy (NYSE: DUK) are three dividend stocks worth close looks today.
1. Black Hills is a Dividend King
Although Black Hills' stock is down 30% over the past year, that may be opening up an opportunity to buy a Dividend King utility on the relative cheap. Indeed, the 4.8% dividend yield here is near its highest levels over the past decade. To be fair, the company has pulled back on capital spending this year so it can focus on reducing leverage. That's a decision at least partly tied to rising rates, and it might lead to a brief slowdown in growth.
That said, there are a lot of things like about Black Hills. For starters, while small by utility standards (with a roughly $3.5 billion market cap), it operates in growing regions. To put a number on that, the utility estimates that its customer growth has been increasing nearly three times as fast as the average population growth in the United States. And while there has been a near-term slowdown in capital spending, the long-term outlook remains strong as the company continues to shift away from dirtier fuels (like coal) and more toward renewable power. All in all, Black Hills believes it can continue to grow earnings by 4% to 6% a year for the foreseeable future. That's not bad when you add in the historically high yield.
2. NextEra Energy is growing fast
NextEra Energy's shares are lower by a touch more than 30% over the past year. The dividend has been increased annually for 29 consecutive years, and the 3.2% dividend yield is near its highest levels in a decade. This utility is among the largest in the sector, with a huge $118 billion market cap. It is also one of the most unique.
That's because NextEra Energy is really two companies in one. The regulated utility piece of the puzzle, which includes Florida Power & Light, is a slow and steady business. But on top of that NextEra is rapidly expanding its footprint in the clean energy sector, where it is already one of the largest producers of solar and wind power in the world.
That makes this stock more of a dividend growth investment -- the dividend has been increased at a 10%+ clip over the past decade. That is exceptionally high for a utility. And there's plenty more growth ahead on the clean energy front, given that NextEra has 34 gigawatts of power production today, which it hopes to roughly double by the end of 2026.
3. Duke Energy is refocusing on regulated assets
Duke is a bit of an oddball here, because the stock is "only" down 14% or so over the past year. That's enough to put the stock near 52-week lows. But the story here is in many ways more positive. The yield is about 4.4%, and the dividend has been increased annually for 19 years.
Essentially, Duke is a large and boring utility (the market cap is around $70 billion) that is getting even more boring. That's because the company recently sold its contract clean energy business so it can refocus on just its regulated assets, including investing in building clean power for its own portfolio. Regulated investments have to be approved by the government, but they generally have more predictable financial returns. If buying a small company like Black Hills isn't something you want to do, then Duke will probably fit the bill for your portfolio if you are a conservative dividend investor.
Down but not out
Although Duke, NextEra, and Black Hills are all out of favor with investors right now, they provide something that is essential to modern life. Add in regulated monopolies and you can see why long-term investors might view the recent poor stock performances as buying opportunities.
NextEra is the best choice for dividend growth investors. Dividend King Black Hills is an attractive option if you favor stocks with long histories of annual dividend increases. And Duke is a slow and steady giant that has been working to increase the consistency of its performance by refocusing around regulated assets. All are near 52-week lows, and could be magnificent additions to your dividend portfolio.
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*Stock Advisor returns as of November 27, 2023
Reuben Gregg Brewer has positions in Black Hills. The Motley Fool has positions in and recommends NextEra Energy. The Motley Fool recommends Duke Energy. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-12-01
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NEE
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If you are looking at thestock market todayand believe that it is about to break out into a new bull market (the criteria calls for a 20% advance from a bear low as well as hitting a new all-time high), then you might want to tilt your portfolio toward growth.
There are a lot of ways to do that, but here are three stocks that you should strongly consider: NextEra Energy (NYSE: NEE), Rockwell Automation (NYSE: ROK), and Fastenal (NASDAQ: FAST). Here's why.
1. NextEra is more than a simple utility
Buying NextEra Energy is really like buying two companies in one. The foundation for the business is the company's regulated utility operation (about 70% of the company). It is fairly boring, selling power largely in the state of Florida via Florida Power & Light. Being regulated, it has a monopoly in the areas it serves, but it has to get the rates it charges and its spending plans approved by the government. Slow and steady is the general path.
On top of that business, NextEra is building a clean energy operation (about 30% of the company). It is already one of the largest providers of solar and wind power on the planet. This business has roughly 34 gigawatts of power today and management believes it will roughly double that by 2026.
The long-term success of this approach shows up in the utility's dividend. Although the yield isn't huge at roughly 3.25%, the annual payment has been increased every year for 29 years. The annualized rate of increase over the past decade was about 10%, which is significant for a utility. If you are expecting a bright future, this foundational stock is one you'll want to watch closely.
2. Rockwell helps companies get more efficient
Rockwell Automation's name is fairly descriptive of what it does -- helping companies incorporate automation technology into their operations. This is valuable in both good markets and bad ones and during periods of economic growth and contraction. The company has a long history of success behind it, highlighted by a streak of 14 consecutive annual dividend increases, with the dividend growing at roughly 9% per year over the past decade. The yield is roughly 1.8%.
But the real story here today is that Rockwell Automation appears attractively priced. The industrial company's price-to-earnings, price-to-sales, and price-to-book value ratios are all below their five-year averages. Recessions can be hard, as companies pull back on capital spending. But when the spigots open back up, Rockwell Automation should be a huge beneficiary as companies look to reign in costs by using technology. Investors are likely to reward the stock when that happens.
3. Fastenal is integral to its customers
The last name to consider is Fastenal, which sells fasteners and tools to industrial companies. It has been a very good business over time, with 24 years of annual dividend increases behind it. The average annual increase over the past decade was around 13.5%. The yield today is around 2.3%.
There's two factors to like here. First, the yield is toward the high end of the stock's historical yield range. While it wouldn't be appropriate to say the stock is cheap, it does seem fairly valued. The second thing to appreciate is that Fastenal has been working to integrate itself into its customers' supply chains. That includes things like installing tool and part vending machines inside of a company's factory to, effectively, take over a company's parts supply chain system. It is hard to extract Fastenal once it is inside a company like that.
What's impressive here, though, is that Fastenal doesn't take its importance for granted. For example, it increased its own inventory levels during the supply chain upheaval caused by the coronavirus pandemic. That depressed Fastenal's results, but ensured its customers could count on it. That's the type of company you want to own in good markets and bad ones.
Three different types of stocks
NextEra Energy is a utility with a growth focus that can provide a foundation for your portfolio. Rockwell Automation is currently out of favor with investors, but when Wall Street gets bullish again the company's focus on helping customers get more efficient will likely draw increasing attention. And Fastenal is increasingly integrated into its customers' businesses in a way that makes it difficult to replace -- it does well when they do well. If you are expecting a bull market, you should probably take a look at all three today.
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*Stock Advisor returns as of November 27, 2023
Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends NextEra Energy. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-11-30
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NEE
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NextEra Energy (NEE) closed at $58.48 in the latest trading session, marking a +0.21% move from the prior day. This change lagged the S&P 500's 0.38% gain on the day. Meanwhile, the Dow experienced a rise of 1.47%, and the technology-dominated Nasdaq saw a decrease of 0.23%.
The parent company of Florida Power & Light Co.'s shares have seen a decrease of 0.12% over the last month, not keeping up with the Utilities sector's gain of 7.47% and the S&P 500's gain of 10.72%.
Market participants will be closely following the financial results of NextEra Energy in its upcoming release. On that day, NextEra Energy is projected to report earnings of $0.53 per share, which would represent year-over-year growth of 3.92%. Alongside, our most recent consensus estimate is anticipating revenue of $6.24 billion, indicating a 1.23% upward movement from the same quarter last year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $3.12 per share and revenue of $27.65 billion, indicating changes of +7.59% and +31.93%, respectively, compared to the previous year.
Investors should also take note of any recent adjustments to analyst estimates for NextEra Energy. These revisions typically reflect the latest short-term business trends, which can change frequently. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.05% higher. NextEra Energy is currently a Zacks Rank #3 (Hold).
Digging into valuation, NextEra Energy currently has a Forward P/E ratio of 18.7. This indicates a premium in contrast to its industry's Forward P/E of 15.58.
We can also see that NEE currently has a PEG ratio of 2.29. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. By the end of yesterday's trading, the Utility - Electric Power industry had an average PEG ratio of 2.88.
The Utility - Electric Power industry is part of the Utilities sector. This industry, currently bearing a Zacks Industry Rank of 59, finds itself in the top 24% echelons of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
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NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
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Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-11-30
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NEE
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For Immediate Release
Chicago, IL – November 30, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: McDonald's Corporation MCD, Amgen Inc. AMGN, NextEra Energy, Inc. NEE, General Mills, Inc. GIS and Take-Two Interactive Software, Inc. TTWO.
Here are highlights from Wednesday’s Analyst Blog:
Top Stock Reports for McDonald's, Amgen and NextEra
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including McDonald's Corporation, Amgen Inc. and NextEra Energy, Inc. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
McDonald's shares have performed roughly in-line with the Zacks Retail - Restaurants industry this year (+6.4% vs. +6.2%). The company’s top and the bottom line increased on a year-over-year basis in the last quarterly report on October 30th. Robust comparable sales, menu price increase and positive guest counts backed the upside.
Also, its emphasis on digital initiatives, campaigns and loyalty programs bodes well. During the quarter, digital sales came in at $9 billion, contributing 40% to the company’s system-wide sales. Given the rise in digital adoption, the company remains optimistic and anticipates the initiatives to drive sales and average checks in the upcoming periods.
Earnings estimates for 2023 have increased in the past 30 days, depicting analysts’ optimism. However, inflationary pressures and stiff competition are primary headwinds.
(You can read the full research report on McDonald’s here >>>)
Shares of Amgen have outperformed the Zacks Medical - Biomedical and Genetics industry over the year-to-date basis (+4.6% vs. -22.9%). The company expects strong sales growth of products like Tezspire, Evenity, Repatha, Prolia and Tavneos to be offset by lower revenues from oncology biosimilars and legacy established products such as Enbrel in the future quarters.
The recently completed acquisition of Horizon Therapeutics is expected to enhance Amgen’s growth prospects. Amgen also has some key pipeline assets in obesity and inflammation, which are indications that can have a large market opportunity. Several data readouts are expected in the next 12 months.
However, increased pricing headwinds and competitive pressure are hurting sales of many of Amgen’s products, including some biosimilars. Weakness in some key brands like Otezla and Lumakras create potential revenue headwinds.
(You can read the full research report on Amgen here >>>)
Shares of NextEra Energy have underperformed the Zacks Utility - Electric Power industry over the year-to-date basis (-28.5% vs. -9.5%). Due to the company’s nature of its business, it is subject to complex regulations. Risks in operating nuclear units, unfavorable weather conditions and increasing supply costs adversely impact earnings.
Nevertheless, NextEra Energy continues to expand its operations through organic projects and acquisitions. The company has many renewable projects in its backlog and continues to enhance its renewable energy generation capacity. NextEra’s subsidiary FPL’s customer base is expanding as Florida’s economy improves.
The company has ample liquidity to meet its near-term debt obligations. It is expanding its operations in the water space through acquisitions. NextEra Energy decided to sell its gas assets in Florida to focus on its core business.
(You can read the full research report on NextEra Energy here >>>)
Other noteworthy reports we are featuring today include General Mills, Inc. and Take-Two Interactive Software, Inc.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
Amgen Inc. (AMGN) : Free Stock Analysis Report
McDonald's Corporation (MCD) : Free Stock Analysis Report
General Mills, Inc. (GIS) : Free Stock Analysis Report
Take-Two Interactive Software, Inc. (TTWO) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-11-30
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NEE
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Below is Validea's guru fundamental report for NEXTERA ENERGY INC (NEE). Of the 22 guru strategies we follow, NEE rates highest using our Shareholder Yield Investor model based on the published strategy of Meb Faber. This strategy looks for companies returning cash to shareholders via dividends, buybacks and debt paydown.
NEXTERA ENERGY INC (NEE) is a large-cap growth stock in the Electric Utilities industry. The rating using this strategy is 55% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
UNIVERSE: PASS
NET PAYOUT YIELD: FAIL
QUALITY AND DEBT: PASS
VALUATION: PASS
RELATIVE STRENGTH: PASS
SHAREHOLDER YIELD: FAIL
Detailed Analysis of NEXTERA ENERGY INC
NEE Guru Analysis
NEE Fundamental Analysis
More Information on Meb Faber
Meb Faber Portfolio
About Meb Faber: Meb Faber is the founder of Cambria Investments. His research has covered a wide spectrum of the investment world, including topics like shareholder yield, trend following, global asset allocation and home country bias. His shareholder yield strategy, which is based on his book "Shareholder Yield" and forms the basis for an ETF of the same name, looks for companies that are focused on creating value for shareholders by returning cash to them in the form of dividends, share buybacks and debt paydown. Meb is also the author of 4 other books and numerous white papers on investing related topics.
Additional Research Links
Top Large-Cap Growth Stocks
Factor-Based Stock Portfolios
Dividend Aristocrats 2023
High Insider Ownership Stocks
Top S&P 500 Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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2023-11-29
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NEE
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Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in NextEra Energy Inc (Symbol: NEE), where a total volume of 59,629 contracts has been traded thus far today, a contract volume which is representative of approximately 6.0 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 51.2% of NEE's average daily trading volume over the past month, of 11.6 million shares. Especially high volume was seen for the $77.50 strike put option expiring January 19, 2024, with 11,128 contracts trading so far today, representing approximately 1.1 million underlying shares of NEE. Below is a chart showing NEE's trailing twelve month trading history, with the $77.50 strike highlighted in orange:
RH (Symbol: RH) saw options trading volume of 3,207 contracts, representing approximately 320,700 underlying shares or approximately 50.3% of RH's average daily trading volume over the past month, of 637,690 shares. Particularly high volume was seen for the $232.50 strike put option expiring December 08, 2023, with 159 contracts trading so far today, representing approximately 15,900 underlying shares of RH. Below is a chart showing RH's trailing twelve month trading history, with the $232.50 strike highlighted in orange:
And PURE Storage Inc (Symbol: PSTG) saw options trading volume of 11,394 contracts, representing approximately 1.1 million underlying shares or approximately 49.9% of PSTG's average daily trading volume over the past month, of 2.3 million shares. Particularly high volume was seen for the $30 strike put option expiring January 19, 2024, with 1,353 contracts trading so far today, representing approximately 135,300 underlying shares of PSTG. Below is a chart showing PSTG's trailing twelve month trading history, with the $30 strike highlighted in orange:
For the various different available expirations for NEE options, RH options, or PSTG options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
Also see:
Institutional Holders of Brown-Forman
Funds Holding BYD
HTBX Options Chain
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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