Buffett Brain · Research note
Score updated 22 Oct 2026 · analysis from 6 Oct 2026
NEE· Utilities
NextEra Energy
NextEra Energy's strong margins are overshadowed by inadequate returns on invested capital and high leverage.
Buffett fit
Weak fit
Owner
48
Durability
91
Management
44
Price
17
Score updated 22 Oct 2026 · analysis from 6 Oct 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Utilities stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
Owning 100% of NextEra Energy would involve managing a capital-intensive utility with a focus on renewable energy.
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NextEra Energy's durability is supported by its consistent profitability over the last five years and a net margin of 24.9%.
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NextEra's management has not been aggressive with , evidenced by a 5-year buyback yield of 0.0%.
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NextEra Energy's valuation is stretched with a of 27.4 and an yield of 1.71%, far below the 8-10% range that offers a .
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- The 5-year price target and the return it implies
- What would change the call
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 162.3% is top-quintile in the utilities sector.
- 229.3% matches the sector's top-quintile cutoff.
- 324.9% net margin exceeds the sector's top-quintile cutoff of 18.3%.
- 4EPS CAGR of 16.28% over 5 years indicates strong earnings growth.
Concerns
5- 1 of 4.9% is below the sector's top-quintile cutoff of 7.7%.
- 2Net debt/EBITDA of 5.78 indicates high risk.
- 3Interest coverage ratio of 2.0 suggests potential difficulty in meeting interest obligations.
- 4Current ratio of 0.60 reflects weak short-term liquidity.
Price history
$78.28-7.3%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
NextEra Energy operates through two main segments: Florida Power & Light Company and NEER, generating and distributing electricity across North America. It utilizes a mix of renewable and traditional energy sources, including wind, solar, nuclear, and natural gas. The company benefits from a top-quintile of 62.3% in its sector, but its of 4.9% is below sector top-quintile. The unit economics are challenged by high capital requirements and .
How this analysis has moved
The call has held across 3 reviews.
Oct 11, 2026 → Oct 22, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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