Definitive Analysis
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NextEra Energy, Inc. Series N J (NEE-PN)

Company Dividend Discount ModelIndustry: Regulated ElectricSector: Utilities

Valuation Snapshot

Stable Growth$49.90 - $94.97$68.06
Multi-Stage$49.65 - $54.16$51.87
Blended Fair Value$59.96
Current Price$75.49
Upside-20.57%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS11.95%12.88%2.051.841.631.471.331.171.020.900.780.67
YoY Growth--11.98%12.83%10.85%10.24%13.91%14.61%13.88%14.45%16.39%9.83%
Dividend Yield--2.90%2.90%2.11%1.73%1.76%1.94%2.14%2.19%2.44%2.27%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)6,502.00
(-) Cash Dividends Paid (M)4,558.00
(=) Cash Retained (M)1,944.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)1,300.40812.75487.65
Cash Retained (M)1,944.001,944.001,944.00
(-) Cash Required (M)-1,300.40-812.75-487.65
(=) Excess Retained (M)643.601,131.251,456.35
(/) Shares Outstanding (M)2,060.902,060.902,060.90
(=) Excess Retained per Share0.310.550.71
LTM Dividend per Share2.212.212.21
(+) Excess Retained per Share0.310.550.71
(=) Adjusted Dividend2.522.762.92
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.85%4.85%5.85%
Fair Value$49.90$68.06$94.97
Upside / Downside-33.90%-9.84%25.81%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)6,502.006,817.067,147.387,493.717,856.838,237.538,484.66
Payout Ratio70.10%74.08%78.06%82.04%86.02%90.00%92.50%
Projected Dividends (M)4,558.005,050.165,579.316,147.896,758.477,413.787,848.31

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.85%4.85%5.85%
Year 1 PV (M)4,584.864,629.014,673.16
Year 2 PV (M)4,598.574,687.564,777.41
Year 3 PV (M)4,600.334,734.524,871.28
Year 4 PV (M)4,591.274,770.694,955.32
Year 5 PV (M)4,572.414,796.855,030.01
PV of Terminal Value (M)79,376.9283,273.1187,320.82
Equity Value (M)102,324.36106,891.74111,628.00
Shares Outstanding (M)2,060.902,060.902,060.90
Fair Value$49.65$51.87$54.16
Upside / Downside-34.23%-31.29%-28.25%

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