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NextEra at 52-week High on Growth Projects, Sound Economy

NextEra Energy, Inc. NEE hit a new 52-week high of $121.51 during the last trading session before eventually closing at $121.48. Juno Beach, FL-based NextEra Energy is a public utility holding company engaged in the generation, transmission, distribution and sale of electricity, with a presence in both the U.S. and Canada.

Over the past 52 weeks, NextEra Energy’s shares have ranged from a low of $93.74 on Sep 11, 2015 to a high of $121.51 on May 16, 2016. The average volume of shares traded over the last three months is approximately 1.98 million.

What is Driving the Stock Upward?

NextEra Energy’s shares have been on the rise since Apr 28, when the company disclosed robust first-quarter 2016 results. First-quarter adjusted earnings of $1.55 per share outpaced the Zacks Consensus Estimate of $1.38 by 12.3%. Reported earnings also soared nearly 10% year over year primarily on the back of continued investments in its subsidiary, Florida Power & Light Company (“FPL”). In fact, in the four trailing quarters, the company has beaten estimates thrice with an average positive surprise of 4.82%.

During its first-quarter call, NextEra reiterated its earnings per share guidance in the range of $5.85–$6.35 for 2016. The company expects earnings to grow at a compound annual growth rate of 6% to 8% per year through 2018, off a 2014 base.

NextEra Energy is benefitting from the improving Florida economy, which is leading to the creation of new jobs. This has resulted in a strong real estate market in the state and increased the demand for utilities. This has allowed FPL to expand its customer base consistently. Over the period 2014–2017, the company expects to add as many as 220,000 service accounts backed by the ongoing economic improvement in the state.

In addition to providing reliable services to its customers, NextEra Energy strives to expand its scale of operations and upgrade existing infrastructure. The company’s Port Everglades Clean Energy Center came online ahead of schedule on Apr 1, 2016. This facility is capable of generating nearly 1,277 megawatts (MW) of electricity, sufficient for meeting energy requirement of more than a quarter million residential customers.

NextEra Energy currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks in the same space include Avangrid, Inc. AGR, Spark Energy, Inc. SPKE and Avista Corporation AVA. While both Avangrid and Spark Energy sport a Zacks Rank #1 (Strong Buy), Avista holds a Zacks Rank #2 (Buy).

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
NEXTERA ENERGY (NEE): Free Stock Analysis Report
AVISTA CORP (AVA): Free Stock Analysis Report
SPARK ENERGY (SPKE): Free Stock Analysis Report
AVANGRID INC (AGR): Free Stock Analysis Report
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