Intrinsic value of NextEra Energy - NEE

Previous Close

$169.17

  Intrinsic Value

$32.73

stock screener

  Rating & Target

str. sell

-81%

Previous close

$169.17

 
Intrinsic value

$32.73

 
Up/down potential

-81%

 
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 79.8

 

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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  17,539
  17,942
  18,403
  18,921
  19,495
  20,124
  20,809
  21,551
  22,351
  23,208
  24,126
  25,105
  26,148
  27,256
  28,431
  29,677
  30,996
  32,391
  33,865
  35,421
  37,063
  38,794
  40,619
  42,542
  44,567
  46,700
  48,944
  51,306
  53,791
  56,404
Variable operating expenses, $m
  5,437
  5,562
  5,705
  5,866
  6,043
  6,238
  6,451
  6,681
  6,929
  7,195
  7,479
  7,783
  8,106
  8,449
  8,814
  9,200
  9,609
  10,041
  10,498
  10,980
  11,489
  12,026
  12,592
  13,188
  13,816
  14,477
  15,173
  15,905
  16,675
  17,485
Fixed operating expenses, $m
  6,836
  6,987
  7,140
  7,297
  7,458
  7,622
  7,790
  7,961
  8,136
  8,315
  8,498
  8,685
  8,876
  9,071
  9,271
  9,475
  9,683
  9,896
  10,114
  10,337
  10,564
  10,796
  11,034
  11,277
  11,525
  11,778
  12,037
  12,302
  12,573
  12,850
Total operating expenses, $m
  12,273
  12,549
  12,845
  13,163
  13,501
  13,860
  14,241
  14,642
  15,065
  15,510
  15,977
  16,468
  16,982
  17,520
  18,085
  18,675
  19,292
  19,937
  20,612
  21,317
  22,053
  22,822
  23,626
  24,465
  25,341
  26,255
  27,210
  28,207
  29,248
  30,335
Operating income, $m
  5,266
  5,394
  5,558
  5,758
  5,993
  6,264
  6,569
  6,909
  7,286
  7,699
  8,149
  8,638
  9,166
  9,735
  10,347
  11,003
  11,704
  12,453
  13,253
  14,104
  15,009
  15,971
  16,993
  18,077
  19,227
  20,445
  21,734
  23,099
  24,543
  26,069
EBITDA, $m
  7,666
  7,849
  8,077
  8,348
  8,661
  9,018
  9,417
  9,859
  10,345
  10,875
  11,451
  12,073
  12,744
  13,465
  14,238
  15,064
  15,946
  16,886
  17,887
  18,951
  20,081
  21,281
  22,552
  23,900
  25,326
  26,836
  28,433
  30,121
  31,904
  33,789
Interest expense (income), $m
  1,193
  1,894
  1,966
  2,055
  2,155
  2,268
  2,394
  2,531
  2,681
  2,843
  3,018
  3,205
  3,405
  3,619
  3,847
  4,089
  4,346
  4,618
  4,906
  5,211
  5,533
  5,873
  6,231
  6,610
  7,008
  7,428
  7,871
  8,337
  8,827
  9,343
  9,886
Earnings before tax, $m
  3,371
  3,427
  3,504
  3,603
  3,725
  3,870
  4,038
  4,229
  4,443
  4,681
  4,944
  5,232
  5,547
  5,888
  6,258
  6,657
  7,086
  7,547
  8,042
  8,571
  9,136
  9,740
  10,384
  11,069
  11,798
  12,574
  13,397
  14,272
  15,200
  16,184
Tax expense, $m
  910
  925
  946
  973
  1,006
  1,045
  1,090
  1,142
  1,200
  1,264
  1,335
  1,413
  1,498
  1,590
  1,690
  1,797
  1,913
  2,038
  2,171
  2,314
  2,467
  2,630
  2,804
  2,989
  3,186
  3,395
  3,617
  3,853
  4,104
  4,370
Net income, $m
  2,461
  2,502
  2,558
  2,630
  2,719
  2,825
  2,948
  3,087
  3,243
  3,417
  3,609
  3,819
  4,049
  4,298
  4,568
  4,859
  5,173
  5,509
  5,870
  6,257
  6,670
  7,110
  7,580
  8,080
  8,613
  9,179
  9,780
  10,418
  11,096
  11,814

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
  99,653
  101,945
  104,565
  107,506
  110,766
  114,342
  118,236
  122,451
  126,992
  131,866
  137,080
  142,643
  148,567
  154,862
  161,542
  168,622
  176,115
  184,040
  192,413
  201,254
  210,583
  220,421
  230,791
  241,717
  253,224
  265,340
  278,093
  291,512
  305,630
  320,480
Adjusted assets (=assets-cash), $m
  99,653
  101,945
  104,565
  107,506
  110,766
  114,342
  118,236
  122,451
  126,992
  131,866
  137,080
  142,643
  148,567
  154,862
  161,542
  168,622
  176,115
  184,040
  192,413
  201,254
  210,583
  220,421
  230,791
  241,717
  253,224
  265,340
  278,093
  291,512
  305,630
  320,480
Revenue / Adjusted assets
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
Average production assets, $m
  71,050
  72,684
  74,552
  76,649
  78,973
  81,523
  84,299
  87,305
  90,542
  94,017
  97,735
  101,701
  105,925
  110,413
  115,176
  120,223
  125,566
  131,216
  137,186
  143,490
  150,141
  157,155
  164,548
  172,338
  180,543
  189,181
  198,273
  207,841
  217,907
  228,494
Working capital, $m
  -2,210
  -2,261
  -2,319
  -2,384
  -2,456
  -2,536
  -2,622
  -2,715
  -2,816
  -2,924
  -3,040
  -3,163
  -3,295
  -3,434
  -3,582
  -3,739
  -3,906
  -4,081
  -4,267
  -4,463
  -4,670
  -4,888
  -5,118
  -5,360
  -5,615
  -5,884
  -6,167
  -6,465
  -6,778
  -7,107
Total debt, $m
  36,415
  38,047
  39,912
  42,006
  44,327
  46,873
  49,646
  52,647
  55,880
  59,350
  63,063
  67,024
  71,242
  75,724
  80,480
  85,521
  90,856
  96,499
  102,460
  108,755
  115,397
  122,402
  129,785
  137,564
  145,758
  154,384
  163,464
  173,019
  183,071
  193,644
Total liabilities, $m
  70,953
  72,585
  74,450
  76,544
  78,865
  81,411
  84,184
  87,185
  90,418
  93,888
  97,601
  101,562
  105,780
  110,262
  115,018
  120,059
  125,394
  131,037
  136,998
  143,293
  149,935
  156,940
  164,323
  172,102
  180,296
  188,922
  198,002
  207,557
  217,609
  228,182
Total equity, $m
  28,700
  29,360
  30,115
  30,962
  31,900
  32,930
  34,052
  35,266
  36,574
  37,977
  39,479
  41,081
  42,787
  44,600
  46,524
  48,563
  50,721
  53,004
  55,415
  57,961
  60,648
  63,481
  66,468
  69,614
  72,929
  76,418
  80,091
  83,955
  88,021
  92,298
Total liabilities and equity, $m
  99,653
  101,945
  104,565
  107,506
  110,765
  114,341
  118,236
  122,451
  126,992
  131,865
  137,080
  142,643
  148,567
  154,862
  161,542
  168,622
  176,115
  184,041
  192,413
  201,254
  210,583
  220,421
  230,791
  241,716
  253,225
  265,340
  278,093
  291,512
  305,630
  320,480
Debt-to-equity ratio
  1.270
  1.300
  1.330
  1.360
  1.390
  1.420
  1.460
  1.490
  1.530
  1.560
  1.600
  1.630
  1.670
  1.700
  1.730
  1.760
  1.790
  1.820
  1.850
  1.880
  1.900
  1.930
  1.950
  1.980
  2.000
  2.020
  2.040
  2.060
  2.080
  2.100
Adjusted equity ratio
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288
  0.288

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,461
  2,502
  2,558
  2,630
  2,719
  2,825
  2,948
  3,087
  3,243
  3,417
  3,609
  3,819
  4,049
  4,298
  4,568
  4,859
  5,173
  5,509
  5,870
  6,257
  6,670
  7,110
  7,580
  8,080
  8,613
  9,179
  9,780
  10,418
  11,096
  11,814
Depreciation, amort., depletion, $m
  2,400
  2,456
  2,519
  2,590
  2,668
  2,754
  2,848
  2,949
  3,059
  3,176
  3,302
  3,436
  3,579
  3,730
  3,891
  4,062
  4,242
  4,433
  4,635
  4,848
  5,072
  5,309
  5,559
  5,822
  6,099
  6,391
  6,698
  7,022
  7,362
  7,719
Funds from operations, $m
  4,861
  4,957
  5,076
  5,220
  5,387
  5,579
  5,796
  6,036
  6,302
  6,593
  6,911
  7,255
  7,628
  8,028
  8,459
  8,921
  9,415
  9,942
  10,505
  11,104
  11,742
  12,420
  13,139
  13,903
  14,712
  15,570
  16,478
  17,440
  18,458
  19,533
Change in working capital, $m
  -43
  -51
  -58
  -65
  -72
  -79
  -86
  -93
  -101
  -108
  -116
  -123
  -131
  -140
  -148
  -157
  -166
  -176
  -186
  -196
  -207
  -218
  -230
  -242
  -255
  -269
  -283
  -298
  -313
  -329
Cash from operations, $m
  4,905
  5,008
  5,134
  5,285
  5,460
  5,659
  5,882
  6,130
  6,403
  6,702
  7,027
  7,379
  7,759
  8,168
  8,607
  9,078
  9,581
  10,118
  10,691
  11,300
  11,949
  12,638
  13,369
  14,145
  14,967
  15,839
  16,761
  17,738
  18,771
  19,863
Maintenance CAPEX, $m
  -2,354
  -2,400
  -2,456
  -2,519
  -2,590
  -2,668
  -2,754
  -2,848
  -2,949
  -3,059
  -3,176
  -3,302
  -3,436
  -3,579
  -3,730
  -3,891
  -4,062
  -4,242
  -4,433
  -4,635
  -4,848
  -5,072
  -5,309
  -5,559
  -5,822
  -6,099
  -6,391
  -6,698
  -7,022
  -7,362
New CAPEX, $m
  -1,386
  -1,634
  -1,868
  -2,097
  -2,324
  -2,550
  -2,776
  -3,005
  -3,238
  -3,475
  -3,717
  -3,967
  -4,223
  -4,488
  -4,763
  -5,047
  -5,343
  -5,650
  -5,970
  -6,303
  -6,651
  -7,014
  -7,393
  -7,790
  -8,205
  -8,638
  -9,092
  -9,568
  -10,066
  -10,587
Cash from investing activities, $m
  -3,740
  -4,034
  -4,324
  -4,616
  -4,914
  -5,218
  -5,530
  -5,853
  -6,187
  -6,534
  -6,893
  -7,269
  -7,659
  -8,067
  -8,493
  -8,938
  -9,405
  -9,892
  -10,403
  -10,938
  -11,499
  -12,086
  -12,702
  -13,349
  -14,027
  -14,737
  -15,483
  -16,266
  -17,088
  -17,949
Free cash flow, $m
  1,165
  974
  811
  669
  546
  441
  351
  276
  216
  168
  133
  110
  100
  101
  114
  139
  177
  226
  288
  362
  450
  551
  666
  796
  941
  1,101
  1,278
  1,472
  1,683
  1,914
Issuance/(repayment) of debt, $m
  1,334
  1,632
  1,865
  2,094
  2,321
  2,546
  2,773
  3,001
  3,233
  3,470
  3,712
  3,961
  4,218
  4,482
  4,756
  5,040
  5,336
  5,642
  5,962
  6,295
  6,642
  7,005
  7,383
  7,779
  8,193
  8,626
  9,080
  9,555
  10,052
  10,573
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  1,334
  1,632
  1,865
  2,094
  2,321
  2,546
  2,773
  3,001
  3,233
  3,470
  3,712
  3,961
  4,218
  4,482
  4,756
  5,040
  5,336
  5,642
  5,962
  6,295
  6,642
  7,005
  7,383
  7,779
  8,193
  8,626
  9,080
  9,555
  10,052
  10,573
Total cash flow (excl. dividends), $m
  2,499
  2,606
  2,676
  2,763
  2,867
  2,987
  3,124
  3,278
  3,449
  3,638
  3,845
  4,071
  4,317
  4,583
  4,871
  5,180
  5,512
  5,868
  6,250
  6,657
  7,092
  7,556
  8,050
  8,575
  9,134
  9,727
  10,358
  11,026
  11,735
  12,487
Retained Cash Flow (-), $m
  -492
  -660
  -755
  -847
  -939
  -1,030
  -1,122
  -1,214
  -1,308
  -1,404
  -1,502
  -1,602
  -1,706
  -1,813
  -1,924
  -2,039
  -2,158
  -2,282
  -2,412
  -2,546
  -2,687
  -2,833
  -2,987
  -3,147
  -3,314
  -3,489
  -3,673
  -3,865
  -4,066
  -4,277
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
  2,007
  1,946
  1,922
  1,916
  1,928
  1,957
  2,002
  2,064
  2,141
  2,234
  2,344
  2,469
  2,611
  2,770
  2,947
  3,141
  3,354
  3,586
  3,838
  4,111
  4,405
  4,722
  5,063
  5,428
  5,820
  6,238
  6,685
  7,161
  7,669
  8,210
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
  1,858
  1,656
  1,491
  1,345
  1,212
  1,092
  982
  879
  783
  694
  609
  530
  456
  387
  325
  268
  217
  173
  135
  103
  77
  56
  40
  28
  19
  12
  8
  5
  3
  2
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

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 (NEE)

Valuation Ratios
P/E Ratio 27.2
Price to Sales 4.9
Price to Book 3.3
Price to Tangible Book
Price to Cash Flow 12.5
Price to Free Cash Flow 37.8
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 $17195 million for the last fiscal year's total revenue generated by NextEra Energy. The default revenue input number comes from 0001 income statement of NextEra Energy. 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 2% 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, 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.
    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 31%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $6689 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.

Corporate tax rate of 27% is the nominal tax rate for NextEra Energy. 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 405.1%.

Life of production assets of 29.6 years is the average useful life of capital assets used in NextEra Energy 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 -12.6%. 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 - $28208 million for NextEra Energy - 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 472 million for NextEra Energy 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 at the current share price and the inputted number of shares is $79.8 billion.

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