NextEra Energy Managed to Beat Its Peers


Mar. 21 2019, Published 12:13 p.m. ET

NextEra Energy’s earnings

NextEra Energy (NEE) has been achieving superior earnings growth for the last few years. The company’s regulated operations in Florida and unparalleled renewables portfolio boosted its earnings.

NextEra Energy’s adjusted EPS increased 15% YoY (year-over-year) in 2018. The company aims to grow 6%–8% per year through 2021. Utilities as a whole intend to grow 4%–6% annually for the next few years. NextEra Energy has one of the biggest and cleanest generation portfolios in the country. The company generates more than half of its total electricity from cleaner sources like natural gas and nuclear.

In the last five years, NextEra Energy has outperformed its peers and broader markets in terms of returns. Including dividends, NextEra Energy returned 130%, while Dominion Energy returned 30%. Utilities at large and SPY returned ~70% each during the same period.

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Dominion Energy

Dominion Energy (D) stock was dull in 2018 due to uncertainties related to its SCANA acquisition and issues with Dominion Midstream Partners. Since the issues have been resolved, investors hope that 2019 will be better.

Contributions from the Cove Point LNG terminal and SCANA’s regulated operations could have a positive impact on Dominion Energy’s earnings in the next few quarters.

Dominion Energy is one of the fastest growing utilities in the country. The company’s earnings increased ~9% compounded annually in the last three years. However, Dominion Energy reported a net income of $2.45 billion in 2018—a fall of more than 16% YoY.

Duke Energy (DUK) and Southern Company (SO) had negative EPS growth in the last three years. They intend to grow 4%–6% annually for the next few years.


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