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NextEra Energy Poised to Grow on Investments: Time to Buy?

We issued an updated research report on NextEra Energy, Inc. NEE on Aug 11. The company started off 2017 on a solid note as more natural gas pipelines came online in the second quarter. Shares of NextEra Energy have outperformed the industry’s rally in the last twelve months. Additionally, earnings per share and total revenue in the second quarter were better than the Zacks Consensus Estimate owing to significant contributions from both FPL and NEER segments.

The company's steps toward lowering emission levels and saving up on electricity bills for customers have aided it to gain a favorable economic environment. This can be attributable to continued shutting down of coal-fired power plants and addition of a natural gas-fueled plant to lower its carbon footprint.

In the last two years, FPL has executed contracts with two independent coal-fired power plants with the goal of shutting down both plants, consequently saving hundreds of millions of dollars for customers. The company is planning to shut down one more coal unit, subject to approval from Florida Public Service Commission.

Through several clean energy initiatives along with focus on increasing production, the company has saved nearly $8.6 billion in fossil fuel costs for customers since 2001. Further, the initiatives have prevented 108 million ton of carbon emission from the power stations.

With long-term earnings growth currently pegged at 7.37%, the company is poised well to carry on its strategic initiatives. Further, NextEra Energy continues to work on its long-term investment in clean energy assets. In sync with the strategy, the company announced plans to add nearly 2,100 megawatts (MW) of universal solar generation across Florida over the next several years and construct a modernized highly fuel-efficient natural gas plant near Fort Lauderdale.

NextEra Energy has brought nearly 2,500 MW of renewable power in service in 2016 and anticipates bringing nearly 4,900–8,000 MW of new renewable projects online over the 2017–2018 time period.

Another company that is benefiting from systematic investments and strategic initiatives is Ameren Corp. AEE. Ameren's in-growth projects, infrastructure upgrades, electric transmission and delivery infrastructure are likely to aid in service reliability and generate higher profit.

Meanwhile, Alliant Energy Corp. LNT is also well positioned for long-term growth owing to strong economic development in service areas. Further, ongoing investment in its regulated natural gas as well as renewable energy assets are expected to benefit the company in the long run.

NextEra Energy, Inc. Price and Consensus

Zacks Rank

NextEra currently carries a Zacks Rank #2 (Buy).

Another top-ranked stock from the same space is Fortis Inc. FTS.

Fortis sports a Zacks Rank #1 (Strong Buy). The company’s current year growth rate is pegged at 10.8%, higher than the industry’s growth level of 4%. You can see the complete list of today’s Zacks #1 Rank stocks here.

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Ameren Corporation (AEE): Free Stock Analysis Report
 
NextEra Energy, Inc. (NEE): Free Stock Analysis Report
 
Alliant Energy Corporation (LNT): Free Stock Analysis Report
 
Fortis Inc. (FTS): Free Stock Analysis Report
 
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