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NEE, DUK, SO, and D: Market Performance and Valuation

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Aug. 14 2018, Updated 11:30 a.m. ET

Market performance and valuation

NextEra Energy (NEE), the biggest component of the Utilities Select Sector SPDR ETF (XLU), is one of the top-rallied stocks among its peers. So far, the stock has risen 10% in 2018 and notably beat broader utilities. Currently, NextEra Energy is trading at an EV-to-EBITDA multiple of ~16x—higher than its five-year average valuation. NextEra Energy is trading at a PE multiple of 14x.

XLU stk

Dominion Energy (D) is one of the laggards among the top utilities this year. Dominion Energy has fallen nearly 13% year-to-date. Currently, Dominion Energy is trading at an EV-to-EBITDA multiple of 14x, while its PE multiple is close to 22x. The stock has significantly underperformed broader utilities. Dominion Energy’s ongoing merger with SCANA (SCG) has pushed the stock lower this year.

Southern Company (SO) stock is trading at an EV-to-EBITDA multiple of 10.7x, which is lower than its five-year average. Duke Energy (DUK) is trading at an EV-to-EBITDA multiple of 11x, which is close to its historical average. Duke Energy has a PE multiple of 21x.

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