NextEra Energy Is Trading Above 200-Day SMA: How to Play the Stock?

Core Insights - NextEra Energy (NEE) is currently trading above its 200-day simple moving average, indicating a bullish trend and steady share price growth over the past 12 months following earnings beats in the last four quarters [1][8]. Investment Strategy and Performance - The company has a well-structured investment plan aimed at enhancing operations, strategic acquisitions, and expanding its customer base, which includes a significant backlog of clean projects [5][10]. - NEE plans to invest over $74 billion between 2025-2029 to expand its clean and renewable energy capacity, with a focus on adding more than 25 GW of new generation and storage capacity by 2034 [8][11]. - The company's return on equity (ROE) stands at 12.42%, surpassing the industry average of 10.3%, indicating efficient use of shareholders' equity [22]. Market Position and Competitive Advantage - NEE's customer base is predominantly residential (89%), which, combined with its advanced technology and operational capabilities, supports consistent above-average returns [10]. - The economic growth in Florida is driving population growth and increasing electricity demand, further enhancing NEE's competitive position [13]. Financial Metrics and Shareholder Value - The current annual dividend is $2.27 per share, with a yield of 2.89%, which is higher than the S&P 500 composite's 1.35%. The company aims for a 10% annual dividend growth through 2026 [27]. - NEE is trading at a forward P/E ratio of 19.58, which is a premium compared to the industry average of 15.12 [25]. Earnings Estimates and Surprises - The Zacks Consensus Estimate for NEE's 2026 earnings per share indicates a year-over-year growth of 8.25%, reflecting positive earnings momentum [15]. - NEE has consistently surpassed earnings expectations in the last four quarters, achieving an average surprise of 4.39% [19][21].