Critical Comparison: NextEra Energy (NEE) and Vivint Solar (VSLR)
NextEra Energy (NYSE: NEE) and Vivint Solar (NYSE:VSLR) are both utilities companies, but which is the better investment? We will compare the two companies based on the strength of their risk, earnings, institutional ownership, dividends, analyst recommendations, valuation and profitabiliy.
This is a summary of recent ratings and recommmendations for NextEra Energy and Vivint Solar, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
NextEra Energy currently has a consensus price target of $149.38, indicating a potential upside of 3.47%. Vivint Solar has a consensus price target of $5.67, indicating a potential upside of 6.92%. Given Vivint Solar’s higher probable upside, analysts plainly believe Vivint Solar is more favorable than NextEra Energy.
Valuation & Earnings
This table compares NextEra Energy and Vivint Solar’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|NextEra Energy||$16.29 billion||4.15||$7.80 billion||$8.21||17.58|
|Vivint Solar||$171.05 million||3.43||-$84.91 million||$0.55||9.64|
NextEra Energy has higher revenue and earnings than Vivint Solar. Vivint Solar is trading at a lower price-to-earnings ratio than NextEra Energy, indicating that it is currently the more affordable of the two stocks.
This table compares NextEra Energy and Vivint Solar’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
NextEra Energy pays an annual dividend of $3.93 per share and has a dividend yield of 2.7%. Vivint Solar does not pay a dividend. NextEra Energy pays out 47.9% of its earnings in the form of a dividend. NextEra Energy has raised its dividend for 7 consecutive years.
Insider and Institutional Ownership
76.8% of NextEra Energy shares are held by institutional investors. Comparatively, 93.8% of Vivint Solar shares are held by institutional investors. 0.5% of NextEra Energy shares are held by company insiders. Comparatively, 4.5% of Vivint Solar shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Risk and Volatility
NextEra Energy has a beta of 0.31, suggesting that its stock price is 69% less volatile than the S&P 500. Comparatively, Vivint Solar has a beta of -0.19, suggesting that its stock price is 119% less volatile than the S&P 500.
NextEra Energy beats Vivint Solar on 13 of the 17 factors compared between the two stocks.
NextEra Energy Company Profile
NextEra Energy, Inc. (NEE) is a holding company. The Company is an electric power companies in North America and, through its subsidiary NextEra Energy Resources, LLC (NEER) and its affiliated entities, is the generator of renewable energy from the wind and sun. NEE also owns and/or operates generation, transmission and distribution facilities to support its services to retail and wholesale customers, and has investments in gas infrastructure assets. Its segments include FPL and NEER. Florida Power & Light Company (FPL) is a rate-regulated electric utility engaged primarily in the generation, transmission, distribution and sale of electric energy in Florida. NEER is a diversified clean energy company with a business strategy that emphasizes the development, acquisition and operation of long-term contracted assets with a focus on renewable projects. NEER owns, develops, constructs, manages and operates electric generation facilities in wholesale energy markets.
Vivint Solar Company Profile
Vivint Solar, Inc. offers distributed solar energy, electricity generated by a solar energy system installed at or near customers’ locations, to residential customers. Through investment funds, the Company owns solar energy systems it installs and provides solar electricity pursuant to long-term contracts with its customers. The Company also sells solar energy systems outright to customers. The Company deploys its direct-to-home sales force to provide in-person professional consultations to prospective customers to evaluate the feasibility of installing a solar energy system at their residence. The Company’s systems use communication gateways and monitoring services to collect performance data. The Company operates in Arizona, California, Connecticut, Florida, Hawaii, Maryland, Massachusetts, New Jersey, New Mexico, New York, Pennsylvania, South Carolina, Texas and Utah. The Company purchases solar panels directly from multiple manufacturers.
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