NextEra: Looks Expensive, But Likely Deserves Its Current Valuation


  • NextEra trades at a significant premium.
  • The company is in a unique position in the industry due to the long-term decarbonization trend.
  • NextEra increases dividends at a faster pace.
  • I think NextEra’s valuation is justified, compared to other green companies, given its strong position in the market.

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Main thesis

NextEra Energy (NYSE:NEE) is trading at a significant premium to the utility industry and the market. At first glance, it may seem that the company is overvalued. However, this is not quite true in my opinion.

utilities companies valuation

NEE p/s ratio

nextera PEG ratio by years

chart by author

Levelized Cost of Energy


NextEra energy costs


NextEra dividend yield

Data by YCharts

nextera and its peers valuation

Seeking Alpha

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in NEE over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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