uploads///Part

Analyzing NextEra Energy’s 3Q15 Cash Flows and Capital Expenditure

By

Nov. 18 2015, Updated 2:04 p.m. ET

Cash flows

NextEra Energy (NEE) generated $1.6 billion in operating cash flows in 3Q15, which was similar to 3Q14. Florida Power and Light (or FPL) contributed $636 million, or 40%, to total operating cash flows in 3Q15.

Article continues below advertisement

Capital expenditure

Capital expenditure plays an important role for utilities in increasing their regulatory capital base, thereby providing higher returns for utilities, since regulated tariff also takes into account return on equity. Over the last few years, utilities (XLU) took advantage of low interest rates by modernizing their plants and building new capacity.

Out of the $1.9 billion NEE spent during the quarter, $990 million went to FPL, $774 million went to NextEra Energy Resources (or NEER), and the remaining $233 million went to corporate purposes.

FPL spent $200 million on building new capacity and another $146 million on expanding existing capacities. FPL spent $440 million on transmission and distribution infrastructure and $99 million on restocking nuclear fuel.

During 3Q15, NEER spent $305 million on new wind capacities, $306 million on new solar capacities, and $71 million on nuclear fuel.

Dividends

As stated earlier, NextEra Energy (NEE) declared a dividend of $0.77 per share during the quarter, resulting in a dividend payout ratio of 40% of earnings during the quarter. NEE’s dividend for fiscal 2015 will be $3.08 a share. Based on the closing stock price as of November 3, NEE had a dividend yield of 3.01%, much lower than Duke Energy’s (DUK) 4.6% and the SPDR Utilities ETF’s (XLU) 3.6%.

Advertisement

More From Market Realist

  • Honeywell sign
    Earnings Report
    CNBC Pro Stocks to Buy Before Q1 Earnings
  • Men walking by Morgan Stanley headquarters
    Financials
    Morgan Stanley’s (MS) Stock Forecast Before Q1 Earnings
  • Carnival cruise ship sailing
    Consumer
    Carnival's (CCL) Stock Forecast Before Q1 Business Update
  • GameStop store
    Consumer
    GME's Earnings Are Coming: Will It Be Mayday for Shorts or WallStreetBets?
  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.