Today we're going to take a closer look at Large-Cap Technology company NextEra Energy, whose shares are currently trading at $72.99. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!
a Lower P/B Ratio Than Its Sector Average but Trades Above Its Graham Number:
NextEra Energy, Inc., through its subsidiaries, generates, transmits, distributes, and sells electric power to retail and wholesale customers in North America. The company belongs to the Technology sector, which has an average price to earnings (P/E) ratio of 30.44 and an average price to book (P/B) ratio of 4.19. In contrast, NextEra Energy has a trailing 12 month P/E ratio of 25.4 and a P/B ratio of 2.96.
NextEra Energy has moved -7.7% over the last year compared to 15.9% for the S&P 500 — a difference of -23.6%. NextEra Energy has a 52 week high of $86.1 and a 52 week low of $61.72.
Growing Revenues but Not Enough Current Assets to Cover Current Liabilities:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $19,204 | $17,997 | $17,069 | $20,956 | $28,114 | $23,500 |
| Operating Margins | 28% | 28% | 17% | 19% | 36% | 32% |
| Net Margins | 20% | 16% | 21% | 20% | 26% | 30% |
| Net Income (M) | $3,769 | $2,919 | $3,573 | $4,147 | $7,310 | $6,946 |
| Net Interest Expense (M) | -$1,517 | -$2,703 | $262 | -$249 | -$2,949 | $2,737 |
| Depreciation & Amort. (M) | $4,216 | $4,052 | $3,924 | $4,503 | $5,879 | $5,462 |
| Diluted Shares (M) | 1,942 | 1,969 | 1,972 | 1,979 | 2,031 | 2,059 |
| Earnings Per Share | $1.94 | $1.48 | $1.81 | $2.1 | $3.6 | $3.37 |
| EPS Growth | n/a | -23.71% | 22.3% | 16.02% | 71.43% | -6.39% |
| Avg. Price | $47.71 | $62.62 | $76.71 | $76.01 | $60.74 | $73.89 |
| P/E Ratio | 24.22 | 42.03 | 42.15 | 36.02 | 16.51 | 21.86 |
| Free Cash Flow (M) | $4,582 | $3,538 | $2,558 | $2,257 | $4,197 | $6,425 |
| CAPEX (M) | $3,573 | $4,445 | $4,995 | $6,005 | $7,104 | $6,835 |
| EV / EBITDA | 10.0 | 14.95 | 24.6 | 19.64 | 8.89 | 13.67 |
| Total Debt (M) | $5,070 | $15,676 | $18,510 | $21,002 | $25,274 | $26,745 |
| Net Debt / EBITDA | 0.47 | 1.59 | 2.61 | 2.26 | 1.4 | 1.95 |
| Current Ratio | 0.53 | 0.47 | 0.53 | 0.51 | 0.55 | 0.47 |
NextEra Energy benefits from growing revenues and increasing reinvestment in the business, strong operating margins with a stable trend, and generally positive cash flows. The company's financial statements show positive EPS growth and healthy leverage levels. However, the firm has not enough current assets to cover current liabilities because its current ratio is 0.47.
