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NextEra Energy’s Stock Valuation Compared to Peers

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Mar. 7 2018, Updated 12:45 p.m. ET

Valuation

The Florida-based NextEra Energy’s (NEE) stock is currently trading at a price-to-earnings (or PE) multiple of 21.0x. It has a five-year historical average 20x. The average PE multiple for utilities is around 13.0x. So, NEE seems to be trading at a premium to peers as well as its historical average.

Peer Dominion Energy (D) stock is trading at a valuation multiple of 22x. Duke Energy’s (DUK) valuation multiple is 21.0x.

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NextEra Energy stock is presently trading at an EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) valuation multiple of 14.5x. It has a five-year historical average near 13.0x. The average EV-to-EBITDA multiple for utilities is 11.0x. So, based on EV-to-EBITDA multiple as well, NEE seems to be trading at a premium to both its historical average and the industry average (XLU).

Let’s move on to NRG Energy next in this series.

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