Critical Review: 8point3 Energy Partners (CAFD) vs. NextEra Energy (NEE)
8point3 Energy Partners (NASDAQ: CAFD) and NextEra Energy (NYSE:NEE) are both oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, profitabiliy, risk, dividends, institutional ownership and valuation.
Valuation and Earnings
This table compares 8point3 Energy Partners and NextEra Energy’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|8point3 Energy Partners||$67.15 million||6.08||$51.64 million||N/A||N/A|
|NextEra Energy||$16.29 billion||4.11||$7.80 billion||$8.21||17.44|
NextEra Energy has higher revenue and earnings than 8point3 Energy Partners.
This table compares 8point3 Energy Partners and NextEra Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|8point3 Energy Partners||23.87%||1.94%||1.11%|
Volatility & Risk
8point3 Energy Partners has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500. Comparatively, NextEra Energy has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500.
This is a breakdown of recent ratings for 8point3 Energy Partners and NextEra Energy, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|8point3 Energy Partners||2||9||3||0||2.07|
8point3 Energy Partners presently has a consensus target price of $15.54, indicating a potential upside of 6.96%. NextEra Energy has a consensus target price of $150.56, indicating a potential upside of 5.17%. Given 8point3 Energy Partners’ higher possible upside, analysts plainly believe 8point3 Energy Partners is more favorable than NextEra Energy.
Insider & Institutional Ownership
55.8% of 8point3 Energy Partners shares are owned by institutional investors. Comparatively, 76.8% of NextEra Energy shares are owned by institutional investors. 0.5% of NextEra Energy shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
8point3 Energy Partners pays an annual dividend of $1.06 per share and has a dividend yield of 7.3%. NextEra Energy pays an annual dividend of $3.93 per share and has a dividend yield of 2.7%. NextEra Energy pays out 47.9% of its earnings in the form of a dividend. 8point3 Energy Partners has increased its dividend for 7 consecutive years. 8point3 Energy Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
NextEra Energy beats 8point3 Energy Partners on 8 of the 15 factors compared between the two stocks.
8point3 Energy Partners Company Profile
8point3 Energy Partners LP owns, operates and acquires solar energy generation projects. As of November 30, 2016, Company’s portfolio comprised interests in 642 Megawatt (MW) of solar energy projects. The Company is developing projects under utility, commercial and industrial (C&I) and residential categories. As of November 30, 2016, the Company owned interests in nine utility-scale solar energy projects; four C&I solar energy projects, and a portfolio of residential Distributed generation (DG) Solar assets. The Company’s utility project portfolio comprises projects, which include Maryland Solar, Solar Gen 2, Lost Hills Blackwell, North Star, RPU, Quinto, Hooper and Kingbird. The Company’s C&I projects comprise UC Davis, Macy’s California, Macy’s Maryland and Kern. The Company’s residential portfolio targets homeowners in the United States.
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.
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