NextEra Energy NEE reported mixed fourth-quarter 2024 earnings results on Jan. 24. Earnings per share improved 1.9% year over year, while total revenues declined 21.7% year over year due to weaker contributions from Florida Power & Light Company (“FPL”) and NextEra Energy Resources.

Yet, due to its efficient execution of plans and smart capital investment, NextEra Energy was able to surpass earnings per share expectations in the fourth quarter. The company surpassed expectations in all the past four quarters, with an average earnings surprise of 6.50%.Zacks Investment Research

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Highlights of NextEra Energy Stock’s Q4 Earnings

NextEra Energy reported fourth-quarter 2024 adjusted earnings of 53 cents per share, which beat the Zacks Consensus Estimate of 51 cents by 3.9%. The bottom line also increased nearly 1.9% year over year.

In the fourth quarter, NEE’s operating revenues were $5.38 billion, which lagged the Zacks Consensus Estimate of $6.49 billion by 17% and the year-ago quarter’s revenues by 21.7%.

During the quarter, the company’s unit NextEra Energy Resources further expanded its contracted renewables backlog by adding nearly 3.3 gigawatts (GW) of renewable projects in the quarter under discussion. Its backlog additions include nearly 1,200 megawatts (MW) of wind projects, 1,000 MW of solar projects, 1,000 MW of battery storage projects and 100 MW of wind repowering. The company’s renewables backlog is now more than 25 GW.

NextEra Energy Resources continues to make progress in evaluating the recommissioning of its Duane Arnold Energy Center in Iowa. The company also filed a notice with the Nuclear Regulatory Commission to request a licensing change and has plans to restart plant operations as early as the end of 2028. It currently operates seven nuclear power units in the United States to provide clean electricity to its customers.

NextEra Energy’s unit FPL continues to focus on making smart capital investments that keep bills as low as possible while delivering reliable electricity. As a consequence, its typical residential customer bill is nearly 40% below the national average.

NextEra Energy Shares Outperform Industry, Sector & S&P

The increase in NextEra Energy’s share prices is a reflection of the strong performance of the company and customer growth, which are boosting demand for its services.

NextEra Share Price Performance (One year)Zacks Investment Research

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Factors Acting as Tailwind for NextEra Energy Stock

Capital-intensive, domestic-focused NextEra Energy will benefit from the Fed’s decision to reduce interest rates. The U.S. Federal Reserve has lowered the benchmark rate by 100 basis points, bringing down rates to 4.25-4.5% from the 5.25-5.5% range.

Nearly 89% of NEE’s customers were residential, and 11% were commercial. NextEra Energy’s unmatched scale, experience and technology lead to predictable, superior returns. Its wide operation and increasing renewables assets create unmatched competitive advantages. Improving economic conditions in Florida allows the company to add new customers and cater to the rising demand.

Story Continues

NextEra Energy Resources continues to make long-term investments in clean energy assets. The company expects to be able to add 36.5-46.5 GW of new renewables in the 2024-2027 period to the generation portfolio via clean energy investments.

FPL's best-in-class non-fuel O&M cost per customer is 50% lower than the second-best in its peer group of large utilities, saving customers more than $24 each month on a typical 1,000-kilowatt-hour residential customer bill compared with an average-performing utility. This unit continues to plan and add clean sources to efficiently serve its customers. In the 2026-2029 period, FPL expects to add nearly 5.4 GW of new solar generation facilities and around 3.4 GW of new battery storage for the benefit of customers.

NextEra Energy’s Earnings Estimates Moving North

The company expects its 2025 earnings per share in the range of $3.45-$3.70 compared with $3.43 a year ago. The Zacks Consensus Estimate for NEE’s 2025 and 2026 earnings per share indicates year-over-year growth of 7.29% and 802%, respectively. It expects to increase its earnings per share in the range of 6-8% annually through 2027 from the 2024 level.Zacks Investment Research

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NextEra Energy Stock Returns Higher Than its Industry

Return on Equity (ROE) shows how effectively a company’s management is utilizing investors’ money to generate returns. The ROE of the company is better than its industry.Zacks Investment Research

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NextEra Energy Raises Value of Shareholders

NextEra Energy plans to increase the dividend rate annually by 10%, at least through 2026, from the 2024 base, subject to its board’s approval. The current annual dividend of the company is $2.06 per share, and the dividend yield of 2.88% is better than the Zacks S&P 500 Composite’s yield of 1.5%. Check NEE’s dividend history here.

Another utility, Duke Energy’s DUK current annual dividend is $4.18 per share, reflecting a dividend yield of 3.73%.

NextEra Energy’s Shares Trading at a Premium

The company is currently valued at a premium compared to its industry on a forward 12-month P/E basis. NextEra Energy is currently trading at 19.34X compared with the industry average of 14.4%.Zacks Investment Research

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Wrapping Up

NextEra Energy continues with stable performance, backed by rising demand for clean energy in its service territories. The reliability of its services and electricity bills lower than the national average creates a competitive advantage for the company. NEE’s wide presence in the United States and declining interest rates will add to its benefit.

Despite its premium valuation, investors can add this premier Zacks Rank #2 (Buy) utility to their portfolio, given its stable ROE, strong operating cash flow and regular dividend payment capabilities.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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