AQN - NextEra Energy: Much Better Dividend Choices Available Amongst Utilities

2024-07-04 04:36:18 ET

Summary

• We gave NextEra Energy a Sell rating the last time around.
• The stock has been strong, and our call has so far proven incorrect.
• We review why the risks remain high and why we think this goes far lower ultimately.
• We also examine the case for the 8.4% yielding units.

We turned bearish on NextEra Energy, Inc. ( NEE ) at the beginning of the year. A strong bounce off the lows was behind us, earnings estimates were optimistic and the valuation was aloft. The stock price had room to drop and the valuation would still remain in the unreasonable territory. Using historical data, metrics such as the EV to EBITDA and P/E ratio favored close to a 30% price decline from that point. The conclusion to that piece noted the crux of the matter....

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