How Good Has NEE Stock Actually Been?

Core Viewpoint - NextEra Energy's stock experienced a significant surge of over 20% from mid-September to late October, outperforming the S&P 500 for the year, but questions remain about whether this rebound compensates for previous underperformance [1]. One Year Performance - Investors who purchased NextEra stock on December 1, 2024, faced an initial decline of nearly 10%, but the recent surge has resulted in a 7.8% return for the year, or 13.1% when including the company's dividend yield of approximately 2.1% [2]. Market Comparison - The S&P 500 has increased by 13.1% for the year without reinvested dividends, and 15% when including them, indicating that NextEra's performance, while improved, still lags behind the broader market [3]. Key Financial Metrics - NextEra Energy has a market capitalization of $176 billion, with a current stock price of $84.58, a gross margin of 36.09%, and a dividend yield of 2.68% [4]. Three and Five Year Performance - Over the past three years, NextEra's stock has underperformed the market, showing a slight loss of 0.8% without dividends, but an 11.2% return when dividends are included, compared to the S&P 500's 67.2% absolute return [5]. - In the five-year view, NextEra's stock has returned 33.2%, significantly trailing the S&P 500's 103.6% return, highlighting a gap of over 70 percentage points [5]. Historical Context - The last five years have been challenging for NextEra's shares, contrasting sharply with the previous five years (December 1, 2016, to December 1, 2020), during which NextEra achieved total stock returns of 237.6%, far exceeding the S&P 500's 94.6% [6]. Investment Strategy - NextEra Energy is characterized as a utility and dividend stock that typically rewards long-term investments more than short-term ones, suggesting a "slow and steady" approach to investment success [7].