NextEra Energy (NEE) is one of the greenest power companies in the United States. The company also continues to deliver strong earnings and has given positive guidance going forward. Throw in a rock solid dividend and reasonable valuation, and there is a lot to like about this Zacks #2 Rank (Buy) stock.
Solid Quarter
The company reported earnings per share of $1.11, beating the Zacks Consensus Estimate by 5 cents. It was a 12.1% increase over the same quarter in 2009.
Total revenues decreased 5.8% due to a lower average price per kilowatt-hour. However, energy sales in millions of kilowatt-hours increased 4.4% year-over-year. Revenue from its wind and solar division increased 5.9%.
The operating margin improved from 15.9% to 19.7% due to lower fuel, purchased power and interchange expenses.
Outlook
Management expects earnings per share in the range of $4.25 to $4.65 for 2010. The Zacks Consensus Estimate is toward the lower end of this range at $4.37. This represents 8% annual growth. The current estimate for 2011 is 4% higher at $4.55.
The company expects earnings per share to grow at a 5% to 7% annual clip through 2014. While this is nothing spectacular, it is growth, and growth you can almost bank on.
Stable Dividend
The stock has an attractive dividend yield of 3.6%. The company also has a history of steadily raising its dividend. Since 2000, it has increased at a compound annual growth rate of 6.4%.
The company has increased its dividend every year since 1994.
Fundamentals
Shares trade at 12.6x forward earnings, a discount to the industry average of 13.9x. Its price to book ratio is very reasonable at 1.7.
NextEra Energy has solid profitability for a utility company. Its return on equity of 13.2% is higher than the industry average of 9.5%. Also, its net margin of 12.1% trumps the industry average of 7.9%.
Company Description
NextEra Energy has two subsidiaries: Florida Power & Light and NextEra Energy Resources.
FPL is an electric utility company serving approximately 4.5 million customers accounts in Florida. NextEra Energy Resources is the largest generator of wind and solar energy in North America. Total revenues were divided as follows:
Florida Power & Light: 73%
NextEra Energy Resources: 27%
The company has a market cap of $22.9 billion.
NEXTERA ENERGY (NEE): Free Stock Analysis Report
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