NEXTERA ENERGY INC (NEE) Stock Analysis
NEXTERA ENERGY INC (NEE) Stock Analysis
Analysis from 10-Q filed 2025-10-28. Data as of Q4 2025.
Overall Grade: F (Concerning)
NEXTERA ENERGY INC faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 6.8% | Below expectations |
| FCF Margin | 48.2% | Strong cash generation |
| Debt/Equity | 1.7x | Elevated debt |
Investment Thesis: Healthy free cash flow margin of 48.2% provides financial flexibility for growth and shareholder returns.
Explore NEXTERA ENERGY INC: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: NEXTERA ENERGY INC earns 6.8% ROIC, Top 50% in Utilities
NEXTERA ENERGY INC's trailing-twelve-month ROIC of 6.8% ranks Top 50% in Utilities companies (sector median: 5.8%), driven by NOPAT margin of 37.6% combined with asset turnover of 0.1x. Source: 10-Q filed 2025-10-28.
| Metric | NEE | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 6.8% | Warning | Above sector median of 5.8% |
| Return on Equity (ROE) | 13.2% | Adequate | Moderate equity returns |
| Operating Margin | 32.0% | Excellent | Efficient operations |
Cash Flow: NEXTERA ENERGY INC generates $12.5B FCF at 48.2% margin, positive NaN/8 quarters
NEXTERA ENERGY INC generated $12.5B in free cash flow (TTM), a 48.2% FCF margin, a margin that ranks Top 5% in Utilities. Operating cash flow exceeds net income by 1.8x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-10-28.
| Metric | NEE | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 48.2% | Excellent | Excellent cash conversion |
| Free Cash Flow (TTM) | $12.5B | Good | Positive cash generation |
| OCF/Net Income | 1.8x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: NEXTERA ENERGY INC at 1.7x leverage
NEXTERA ENERGY INC's debt-to-equity ratio of 1.7x reflects high leverage. Total debt of $95.0B offset by $3.0B in cash. Source: 10-Q filed 2025-10-28.
| Metric | NEE | Rating | Context |
|---|---|---|---|
| Debt to Equity | 1.7x | Warning | Elevated leverage |
| Net Cash Position | $-92.0B | Warning | Net debt position |
Valuation: NEXTERA ENERGY INC trades at 24.2x earnings
NEXTERA ENERGY INC trades at a P/E of 24.2x. Free cash flow yield of 7.5% offers attractive cash returns relative to price.
| Metric | NEE | Rating | Context |
|---|---|---|---|
| P/E Ratio | 24.2x | Adequate | Premium valuation |
| EV/Sales | 9.8x | Adequate | Growth premium priced in |
| FCF Yield | 7.5% | Good | Attractive cash return |
| Dividend Yield | 2.8% | Adequate | Growth focus over income |
Capital Allocation: NEXTERA ENERGY INC returns 2.8% shareholder yield
NEXTERA ENERGY INC's total shareholder yield is 2.8% (dividends 2.8% + buybacks). Source: 10-Q filed 2025-10-28.
| Metric | NEE | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 2.8% | Adequate | Dividend + buyback yield combined |
| Total Capital Returned (TTM) | $4.7B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 6.8% | Top 50% | 1.2x above |
| Free Cash Flow Margin | 48.2% | Top 5% | - |
| Operating Margin | 32.0% | Top 25% | 1.6x above |
| Return on Equity (ROE) | 13.2% | Top 25% | 1.4x above |
| P/E Ratio | 24.2x | N/A | - |
Financial Scorecard
| Metric | NEE | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 6.8% | Warning | Top 50% of sector (median: 5.8%) |
| Free Cash Flow Margin | 48.2% | Excellent | Top 5% of sector (median: 0.0%) |
| Debt to Equity Ratio | 174.0% | Warning | High financial leverage |
| P/E Ratio (Price-to-Earnings) | 24.2x | Adequate | Fair value |
| Free Cash Flow Yield | 7.5% | Good | Solid cash yield |
Frequently Asked Questions
Q: What is NEXTERA ENERGY INC's Return on Invested Capital (ROIC)?
NEXTERA ENERGY INC (NEE) has a trailing twelve-month Return on Invested Capital (ROIC) of 6.8%. This compares above the sector median of 5.8%. An ROIC below 8% suggests the company may be destroying shareholder value.
Q: What is NEXTERA ENERGY INC's Free Cash Flow Margin?
NEXTERA ENERGY INC (NEE) has a free cash flow margin of 48.2%, generating $12.5 billion in free cash flow over the trailing twelve months. A FCF margin above 20% indicates excellent cash conversion and a high-quality business model.
Q: Is NEXTERA ENERGY INC stock overvalued or undervalued?
NEXTERA ENERGY INC (NEE) trades at a P/E ratio of 24.2x, which is above the sector median of N/A. The EV/Sales multiple is 9.8x. Free cash flow yield is 7.5%, which represents an attractive cash return to investors.
Q: Does NEXTERA ENERGY INC pay a dividend?
NEXTERA ENERGY INC (NEE) currently pays a dividend yield of 2.8%. Including share buybacks, the total shareholder yield is 2.8%. This yield is moderate, suggesting a balance between income and growth reinvestment.
Q: How much debt does NEXTERA ENERGY INC have?
NEXTERA ENERGY INC (NEE) has a debt-to-equity ratio of 1.7x with total debt of $95.0 billion. Net debt position is $92.0 billion.
Q: What is NEXTERA ENERGY INC's revenue and earnings growth?
NEXTERA ENERGY INC (NEE) grew revenue by 10.7% year-over-year. Earnings per share decreased by 2.4% compared to the prior year. Solid growth above 10% suggests healthy business momentum.
Q: How does NEXTERA ENERGY INC compare to competitors in Utilities?
Compared to other companies in Utilities, NEXTERA ENERGY INC (NEE) shows: ROIC of 6.8% is above the sector median of 5.8% (Top 40%). FCF margin of 48.2% exceeds the sector median of 0.0% (Top 0% of sector). These rankings are based on MetricDuck's analysis of all Utilities companies with available SEC filings.
Q: What warning signs should I watch for with NEXTERA ENERGY INC?
Investors in NEXTERA ENERGY INC (NEE) should monitor these potential warning signs: 1) ROIC has been declining, potentially signaling deteriorating competitive position. 2) Debt-to-equity of 1.7x is elevated. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-10-28. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.