Intrinsic value of NextEra Energy, Inc. - NEE

Previous Close

$190.87

  Intrinsic Value

$17.85

stock screener

  Rating & Target

str. sell

-91%

Previous close

$190.87

 
Intrinsic value

$17.85

 
Up/down potential

-91%

 
Rating

str. sell

We calculate the intrinsic value of NEE stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 91.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  9.70
  9.23
  8.81
  8.43
  8.08
  7.78
  7.50
  7.25
  7.02
  6.82
  6.64
  6.47
  6.33
  6.19
  6.08
  5.97
  5.87
  5.78
  5.71
  5.63
  5.57
  5.51
  5.46
  5.42
  5.37
  5.34
  5.30
  5.27
  5.25
  5.22
Revenue, $m
  18,350
  20,043
  21,808
  23,646
  25,557
  27,545
  29,610
  31,756
  33,986
  36,304
  38,715
  41,221
  43,830
  46,545
  49,372
  52,319
  55,390
  58,594
  61,937
  65,427
  69,072
  72,881
  76,863
  81,026
  85,381
  89,938
  94,708
  99,703
  104,933
  110,412
Variable operating expenses, $m
  12,826
  14,010
  15,244
  16,529
  17,865
  19,254
  20,697
  22,197
  23,756
  25,377
  27,062
  28,814
  30,637
  32,535
  34,511
  36,571
  38,718
  40,957
  43,294
  45,734
  48,282
  50,944
  53,727
  56,637
  59,681
  62,867
  66,201
  69,692
  73,348
  77,178
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  12,826
  14,010
  15,244
  16,529
  17,865
  19,254
  20,697
  22,197
  23,756
  25,377
  27,062
  28,814
  30,637
  32,535
  34,511
  36,571
  38,718
  40,957
  43,294
  45,734
  48,282
  50,944
  53,727
  56,637
  59,681
  62,867
  66,201
  69,692
  73,348
  77,178
Operating income, $m
  5,523
  6,033
  6,564
  7,117
  7,693
  8,291
  8,913
  9,559
  10,230
  10,928
  11,653
  12,408
  13,193
  14,010
  14,861
  15,748
  16,673
  17,637
  18,643
  19,694
  20,791
  21,937
  23,136
  24,389
  25,700
  27,071
  28,507
  30,010
  31,585
  33,234
EBITDA, $m
  9,821
  10,728
  11,673
  12,656
  13,679
  14,743
  15,848
  16,997
  18,191
  19,431
  20,721
  22,063
  23,459
  24,912
  26,426
  28,003
  29,647
  31,361
  33,151
  35,019
  36,970
  39,008
  41,139
  43,368
  45,699
  48,138
  50,691
  53,364
  56,163
  59,096
Interest expense (income), $m
  1,193
  2,036
  2,410
  2,791
  3,188
  3,602
  4,032
  4,479
  4,944
  5,427
  5,929
  6,451
  6,993
  7,557
  8,144
  8,755
  9,392
  10,055
  10,746
  11,467
  12,220
  13,005
  13,825
  14,683
  15,579
  16,516
  17,496
  18,521
  19,595
  20,719
  21,896
Earnings before tax, $m
  3,487
  3,623
  3,773
  3,929
  4,091
  4,259
  4,433
  4,614
  4,803
  4,999
  5,202
  5,414
  5,635
  5,866
  6,106
  6,356
  6,618
  6,891
  7,176
  7,474
  7,786
  8,112
  8,453
  8,810
  9,184
  9,576
  9,986
  10,415
  10,866
  11,338
Tax expense, $m
  941
  978
  1,019
  1,061
  1,105
  1,150
  1,197
  1,246
  1,297
  1,350
  1,405
  1,462
  1,522
  1,584
  1,649
  1,716
  1,787
  1,860
  1,937
  2,018
  2,102
  2,190
  2,282
  2,379
  2,480
  2,585
  2,696
  2,812
  2,934
  3,061
Net income, $m
  2,545
  2,645
  2,754
  2,868
  2,986
  3,109
  3,236
  3,368
  3,506
  3,649
  3,798
  3,952
  4,114
  4,282
  4,457
  4,640
  4,831
  5,030
  5,238
  5,456
  5,684
  5,922
  6,171
  6,431
  6,704
  6,990
  7,290
  7,603
  7,932
  8,277

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  113,972
  124,492
  135,456
  146,870
  158,742
  171,085
  183,912
  197,242
  211,095
  225,494
  240,464
  256,033
  272,234
  289,098
  306,661
  324,962
  344,040
  363,939
  384,703
  406,380
  429,022
  452,679
  477,408
  503,267
  530,317
  558,623
  588,250
  619,270
  651,757
  685,788
Adjusted assets (=assets-cash), $m
  113,972
  124,492
  135,456
  146,870
  158,742
  171,085
  183,912
  197,242
  211,095
  225,494
  240,464
  256,033
  272,234
  289,098
  306,661
  324,962
  344,040
  363,939
  384,703
  406,380
  429,022
  452,679
  477,408
  503,267
  530,317
  558,623
  588,250
  619,270
  651,757
  685,788
Revenue / Adjusted assets
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
Average production assets, $m
  78,224
  85,444
  92,969
  100,803
  108,952
  117,423
  126,227
  135,376
  144,884
  154,766
  165,041
  175,727
  186,846
  198,420
  210,475
  223,035
  236,129
  249,787
  264,038
  278,916
  294,456
  310,693
  327,666
  345,414
  363,980
  383,407
  403,741
  425,032
  447,329
  470,686
Working capital, $m
  -954
  -1,042
  -1,134
  -1,230
  -1,329
  -1,432
  -1,540
  -1,651
  -1,767
  -1,888
  -2,013
  -2,144
  -2,279
  -2,420
  -2,567
  -2,721
  -2,880
  -3,047
  -3,221
  -3,402
  -3,592
  -3,790
  -3,997
  -4,213
  -4,440
  -4,677
  -4,925
  -5,185
  -5,457
  -5,741
Total debt, $m
  44,629
  51,688
  59,045
  66,704
  74,670
  82,952
  91,559
  100,504
  109,799
  119,460
  129,505
  139,952
  150,823
  162,139
  173,924
  186,203
  199,005
  212,357
  226,290
  240,835
  256,028
  271,902
  288,495
  305,846
  323,997
  342,990
  362,870
  383,684
  405,483
  428,318
Total liabilities, $m
  76,475
  83,534
  90,891
  98,550
  106,516
  114,798
  123,405
  132,350
  141,645
  151,306
  161,351
  171,798
  182,669
  193,985
  205,770
  218,049
  230,851
  244,203
  258,136
  272,681
  287,874
  303,748
  320,341
  337,692
  355,843
  374,836
  394,716
  415,530
  437,329
  460,164
Total equity, $m
  37,497
  40,958
  44,565
  48,320
  52,226
  56,287
  60,507
  64,893
  69,450
  74,187
  79,113
  84,235
  89,565
  95,113
  100,891
  106,912
  113,189
  119,736
  126,567
  133,699
  141,148
  148,931
  157,067
  165,575
  174,474
  183,787
  193,534
  203,740
  214,428
  225,624
Total liabilities and equity, $m
  113,972
  124,492
  135,456
  146,870
  158,742
  171,085
  183,912
  197,243
  211,095
  225,493
  240,464
  256,033
  272,234
  289,098
  306,661
  324,961
  344,040
  363,939
  384,703
  406,380
  429,022
  452,679
  477,408
  503,267
  530,317
  558,623
  588,250
  619,270
  651,757
  685,788
Debt-to-equity ratio
  1.190
  1.260
  1.320
  1.380
  1.430
  1.470
  1.510
  1.550
  1.580
  1.610
  1.640
  1.660
  1.680
  1.700
  1.720
  1.740
  1.760
  1.770
  1.790
  1.800
  1.810
  1.830
  1.840
  1.850
  1.860
  1.870
  1.870
  1.880
  1.890
  1.900
Adjusted equity ratio
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,545
  2,645
  2,754
  2,868
  2,986
  3,109
  3,236
  3,368
  3,506
  3,649
  3,798
  3,952
  4,114
  4,282
  4,457
  4,640
  4,831
  5,030
  5,238
  5,456
  5,684
  5,922
  6,171
  6,431
  6,704
  6,990
  7,290
  7,603
  7,932
  8,277
Depreciation, amort., depletion, $m
  4,298
  4,695
  5,108
  5,539
  5,986
  6,452
  6,936
  7,438
  7,961
  8,504
  9,068
  9,655
  10,266
  10,902
  11,565
  12,255
  12,974
  13,725
  14,508
  15,325
  16,179
  17,071
  18,004
  18,979
  19,999
  21,066
  22,184
  23,353
  24,579
  25,862
Funds from operations, $m
  6,843
  7,340
  7,863
  8,407
  8,973
  9,561
  10,172
  10,807
  11,467
  12,153
  12,866
  13,608
  14,380
  15,184
  16,022
  16,895
  17,805
  18,755
  19,746
  20,781
  21,862
  22,993
  24,174
  25,410
  26,703
  28,056
  29,473
  30,957
  32,511
  34,139
Change in working capital, $m
  -84
  -88
  -92
  -96
  -99
  -103
  -107
  -112
  -116
  -121
  -125
  -130
  -136
  -141
  -147
  -153
  -160
  -167
  -174
  -181
  -190
  -198
  -207
  -216
  -226
  -237
  -248
  -260
  -272
  -285
Cash from operations, $m
  6,928
  7,428
  7,954
  8,502
  9,072
  9,664
  10,279
  10,918
  11,583
  12,273
  12,991
  13,738
  14,516
  15,325
  16,169
  17,048
  17,965
  18,921
  19,920
  20,963
  22,052
  23,191
  24,381
  25,627
  26,930
  28,293
  29,721
  31,216
  32,783
  34,423
Maintenance CAPEX, $m
  -3,918
  -4,298
  -4,695
  -5,108
  -5,539
  -5,986
  -6,452
  -6,936
  -7,438
  -7,961
  -8,504
  -9,068
  -9,655
  -10,266
  -10,902
  -11,565
  -12,255
  -12,974
  -13,725
  -14,508
  -15,325
  -16,179
  -17,071
  -18,004
  -18,979
  -19,999
  -21,066
  -22,184
  -23,353
  -24,579
New CAPEX, $m
  -6,912
  -7,220
  -7,525
  -7,834
  -8,149
  -8,471
  -8,804
  -9,149
  -9,508
  -9,882
  -10,275
  -10,686
  -11,119
  -11,574
  -12,054
  -12,560
  -13,094
  -13,657
  -14,251
  -14,878
  -15,540
  -16,237
  -16,973
  -17,748
  -18,566
  -19,427
  -20,335
  -21,291
  -22,297
  -23,357
Cash from investing activities, $m
  -10,830
  -11,518
  -12,220
  -12,942
  -13,688
  -14,457
  -15,256
  -16,085
  -16,946
  -17,843
  -18,779
  -19,754
  -20,774
  -21,840
  -22,956
  -24,125
  -25,349
  -26,631
  -27,976
  -29,386
  -30,865
  -32,416
  -34,044
  -35,752
  -37,545
  -39,426
  -41,401
  -43,475
  -45,650
  -47,936
Free cash flow, $m
  -3,903
  -4,090
  -4,265
  -4,440
  -4,615
  -4,794
  -4,977
  -5,166
  -5,363
  -5,570
  -5,787
  -6,016
  -6,259
  -6,516
  -6,788
  -7,077
  -7,384
  -7,710
  -8,056
  -8,423
  -8,813
  -9,225
  -9,662
  -10,125
  -10,615
  -11,133
  -11,680
  -12,258
  -12,868
  -13,512
Issuance/(repayment) of debt, $m
  6,917
  7,059
  7,357
  7,659
  7,966
  8,282
  8,607
  8,944
  9,295
  9,661
  10,045
  10,447
  10,870
  11,316
  11,785
  12,280
  12,801
  13,352
  13,933
  14,546
  15,192
  15,874
  16,593
  17,351
  18,151
  18,993
  19,880
  20,815
  21,799
  22,835
Issuance/(repurchase) of shares, $m
  808
  816
  853
  887
  920
  952
  984
  1,017
  1,052
  1,088
  1,127
  1,170
  1,216
  1,266
  1,321
  1,381
  1,446
  1,517
  1,593
  1,676
  1,765
  1,862
  1,965
  2,076
  2,195
  2,322
  2,458
  2,602
  2,756
  2,919
Cash from financing (excl. dividends), $m  
  7,725
  7,875
  8,210
  8,546
  8,886
  9,234
  9,591
  9,961
  10,347
  10,749
  11,172
  11,617
  12,086
  12,582
  13,106
  13,661
  14,247
  14,869
  15,526
  16,222
  16,957
  17,736
  18,558
  19,427
  20,346
  21,315
  22,338
  23,417
  24,555
  25,754
Total cash flow (excl. dividends), $m
  3,822
  3,784
  3,944
  4,106
  4,271
  4,440
  4,615
  4,795
  4,983
  5,180
  5,385
  5,601
  5,828
  6,067
  6,318
  6,583
  6,863
  7,158
  7,470
  7,798
  8,145
  8,511
  8,896
  9,303
  9,731
  10,183
  10,658
  11,159
  11,687
  12,242
Retained Cash Flow (-), $m
  -3,353
  -3,461
  -3,607
  -3,755
  -3,906
  -4,061
  -4,220
  -4,386
  -4,558
  -4,737
  -4,925
  -5,122
  -5,330
  -5,548
  -5,778
  -6,021
  -6,277
  -6,547
  -6,831
  -7,132
  -7,449
  -7,783
  -8,136
  -8,508
  -8,899
  -9,312
  -9,747
  -10,206
  -10,688
  -11,196
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  469
  323
  337
  351
  365
  379
  394
  410
  426
  443
  460
  479
  498
  518
  540
  563
  586
  612
  638
  666
  696
  727
  760
  795
  832
  870
  911
  954
  999
  1,046
Discount rate, %
  8.00
  8.40
  8.82
  9.26
  9.72
  10.21
  10.72
  11.26
  11.82
  12.41
  13.03
  13.68
  14.37
  15.09
  15.84
  16.63
  17.46
  18.34
  19.25
  20.22
  21.23
  22.29
  23.40
  24.57
  25.80
  27.09
  28.45
  29.87
  31.36
  32.93
PV of cash for distribution, $m
  434
  275
  262
  246
  229
  212
  193
  175
  156
  137
  120
  103
  87
  73
  59
  48
  38
  30
  22
  17
  12
  9
  6
  4
  3
  2
  1
  1
  0
  0
Current shareholders' claim on cash, %
  99.1
  98.3
  97.6
  96.8
  96.2
  95.5
  94.9
  94.3
  93.7
  93.2
  92.7
  92.1
  91.6
  91.2
  90.7
  90.2
  89.8
  89.3
  88.9
  88.4
  88.0
  87.6
  87.2
  86.7
  86.3
  85.9
  85.4
  85.0
  84.6
  84.2

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.

FINANCIAL RATIOS  of  NextEra Energy, Inc. (NEE)

Valuation Ratios
P/E Ratio 30.7
Price to Sales 5.5
Price to Book 3.7
Price to Tangible Book
Price to Cash Flow 14.1
Price to Free Cash Flow 42.6
Growth Rates
Sales Growth Rate -7.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 9.5%
Cap. Spend. - 3 Yr. Gr. Rate 5.6%
Financial Strength
Quick Ratio 0
Current Ratio 0.2
LT Debt to Equity 114.3%
Total Debt to Equity 126.7%
Interest Coverage 5
Management Effectiveness
Return On Assets 4.3%
Ret/ On Assets - 3 Yr. Avg. 4.5%
Return On Total Capital 5.4%
Ret/ On T. Cap. - 3 Yr. Avg. 5.4%
Return On Equity 12.4%
Return On Equity - 3 Yr. Avg. 12.8%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 55.5%
EBITDA Margin - 3 Yr. Avg. 49.5%
Operating Margin 28.5%
Oper. Margin - 3 Yr. Avg. 26.9%
Pre-Tax Margin 27.2%
Pre-Tax Margin - 3 Yr. Avg. 23.8%
Net Profit Margin 18%
Net Profit Margin - 3 Yr. Avg. 16.1%
Effective Tax Rate 31.5%
Eff/ Tax Rate - 3 Yr. Avg. 31.5%
Payout Ratio 55.4%

NEE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NEE stock intrinsic value calculation we used $16727 million for the last fiscal year's total revenue generated by NextEra Energy, Inc.. The default revenue input number comes from 0001 income statement of NextEra Energy, Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our NEE stock valuation model: a) initial revenue growth rate of 9.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 8%, whose default value for NEE is calculated based on our internal credit rating of NextEra Energy, Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of NextEra Energy, Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of NEE stock the variable cost ratio is equal to 69.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for NEE stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for NextEra Energy, Inc..

Corporate tax rate of 27% is the nominal tax rate for NextEra Energy, Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the NEE stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for NEE are equal to 426.3%.

Life of production assets of 18.2 years is the average useful life of capital assets used in NextEra Energy, Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for NEE is equal to -5.2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $34144 million for NextEra Energy, Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 478.143 million for NextEra Energy, Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of NextEra Energy, Inc. at the current share price and the inputted number of shares is $91.3 billion.

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