NextEra is Trading Above 50 Day SMA: Time to Buy the Stock?

Core Viewpoint - NextEra Energy (NEE) is experiencing a bullish trend, trading above its 50-day simple moving average (SMA), with steady share gains over the past twelve months following earnings beats in the last four quarters [1][3]. Group 1: Performance and Market Position - NextEra Energy has outperformed the Zacks Utility Electric Power industry, the Zacks Utilities sector, and the S&P 500 over the past year [4]. - The company has a trailing 12-month return on equity (ROE) of 11.85%, surpassing the industry average of 9.75%, indicating efficient use of shareholders' equity [16]. Group 2: Economic and Operational Factors - Improving economic conditions in Florida are benefiting NextEra Energy, with its Florida Power & Light Company (FPL) offering residential bills lower than the national average, enhancing its competitive advantage [9]. - FPL has invested in undergrounding power lines, which has increased service reliability and strengthened its power distribution infrastructure, allowing it to meet the demands of a growing customer base [9]. Group 3: Investment and Growth Strategy - NextEra Energy plans to invest in clean energy assets, expecting to add 36.5-46.5 GW of new renewables to its generation portfolio from 2024 to 2027 [10]. - The company is targeting $97 billion to$107 billion in capital expenditures over the same period to strengthen its operations [10]. Group 4: Earnings and Dividend Outlook - The Zacks Consensus Estimate for NEE's earnings per share indicates year-over-year growth of 7% for 2025 and 7.97% for 2026, with an expected annual increase of 6-8% through 2027 [12]. - NextEra Energy plans to increase its dividend rate by 10% annually at least through 2026, with a current annual dividend of $2.27 per share and a dividend yield of 3.08% [19]. Group 5: Valuation - NextEra Energy is currently trading at a premium on a forward 12-month P/E basis, with a valuation of 19.69X compared to the industry average of 14.45X [20].