Nextera Energy Stock? Is Nextera Energy a Good Stock to Invest In?
Is NEXTERA Energy a good stock to invest in?
NEXTERA ENERGY stock performance over the last year has been 1.31%. Is NEXTERA Energy a good stock to invest in? Is it safe to buy NEXTERA ENERGY stock? How often does NEE pay dividends? Will NEXTERA ENERGY give positive returns? Will NEXTERA ENERGY fund be able to beat the market?
What Is Nextera
Nextera is an energy company focused on power generation, midstream energy, and energy storage. Its core businesses include regulated electric utilities (NEE), which are subject to state oversight, and competitive businesses that operate primarily under federal regulation (NEP).
The competitive business segments include the wholesale supply of natural gas, renewable energy, and ancillary services; natural gas transportation services, including storage; and carbon dioxide (CO2)services. The company’s regulated utility provides retail electricity service through retail electric rates as well as transmission and distribution service over approximately 29,000 miles of line.
It has more than 1.6 million customers located primarily in North Carolina, Ohio, and Pennsylvania. As of Dec 31, 2017, it had total assets of $13 billion with revenue that year at $2 billion.
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No matter how you slice it, all businesses need cash. Companies use revenue—generated by selling goods and services—to stay afloat. Without revenue, they can’t pay employees, fund research and development, or create marketing campaigns that boost awareness of their products and drive sales.
Investors track revenue closely because companies tend to see significant growth year after year when they continually introduce new products and services or get existing ones into new markets. Revenue should be considered together with net income—the amount of money a company takes home after expenses like taxes and interest are taken out—and other data points when determining whether an investment is worthwhile.
Operating Cash Flow
Free cash flow is simply operating cash flow minus capital expenditures. Free cash flow can be a critical indicator of financial health for investors, particularly during economic downturns when companies need additional funds for heavy investments or restructuring.
The cash from which dividends are paid comes from operational activities including working capital, which is comprised of accounts receivable, inventory, and other current assets minus accounts payable, accrued expenses, and other current liabilities. Free cash flow helps illustrate how much money is available after paying bills and buying new assets.
A look at Nextera’s history may help you decide whether or not you want to buy its stock. For example, if its price has been steadily increasing over several years, that might be a sign of growing interest in its services.
If it’s had sudden price spikes or drops that are associated with newsworthy events—like mergers and acquisitions—you should take note and learn more about why those happened before investing your money. Keeping an eye on such events can also give you hints as to how well investors think Nextera is doing as an energy company.
Does its performance meet investor expectations? Has it beaten earnings estimates recently, for example? Those can be good signs for future growth potential.
Debt, or leverage, is one of those things that can be very powerful for an investor if used correctly. Used incorrectly, though, and debt can bring down even great companies. Nextera Energy Inc., with revenue of $2.21 billion last year and $1.04 billion in cash flow from operations, has net debt of $35 million on its balance sheet with a debt-to-equity ratio (D/E) of .00. In comparison, NEE’s top peers Peabody Energy Corp., Arch Coal Inc., and Alpha Natural Resources Inc. have ratios of 0.34x, 0.55x, and 1x respectively.
Stock Price History
Nextera Energy Inc. is an electric utility holding company. It develops, owns, and operates various renewable energy assets across its operating regions. In addition, it offers traditional electric services such as transmission and distribution of electricity for retail and wholesale customers as well as solar operations and services. The company was founded on October 16, 2005, and is headquartered in Lenexa, KS.
Nextera Energy Stock Is a Good Stock to Invest in?
The answer depends on how much money you want to earn from your investment. For example, if you want $200.00 today, would you be willing to pay $100.00 for it? If not, then NEE is probably not a good investment for you.
How often does NEE pay dividends?
If you’re looking for an energy stock that consistently pays quarterly dividends, Nextera is not it. Over the past three years, NEE has paid out only one dividend — $0.27 per share on Aug. 26, 2017. The company announced another quarterly dividend of $0.20 on July 19, 2018; however, because Nextera does not pay regular cash dividends, you should be cautious about holding onto your shares hoping for more dividends down the road.
No, I do not think it is. There are too many red flags that indicate a potential future decrease in value. The company is losing money and has trouble making its debt payments. In fact, even though revenues increased from Q4 2013 to Q4 2014, earnings per share decreased. Since 2011, there have been only three-quarters of EPS growth (excluding currency fluctuations). This does not give me confidence that the next few quarters will increase earnings per share either.