NextEra Energy (NYSE: NEE) and 8point3 Energy Partners (NASDAQ:CAFD) are both utilities companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, dividends, analyst recommendations, valuation, profitability, risk and institutional ownership.

Insider & Institutional Ownership

76.8% of NextEra Energy shares are owned by institutional investors. Comparatively, 54.7% of 8point3 Energy Partners 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, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

NextEra Energy pays an annual dividend of $3.93 per share and has a dividend yield of 2.6%. 8point3 Energy Partners pays an annual dividend of $1.06 per share and has a dividend yield of 7.4%. NextEra Energy pays out 45.0% of its earnings in the form of a dividend. NextEra Energy has raised its dividend for 7 consecutive years.

Profitability

This table compares NextEra Energy and 8point3 Energy Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NextEra Energy 24.26% 11.88% 3.40%
8point3 Energy Partners 23.87% 1.94% 1.11%

Valuation & Earnings

This table compares NextEra Energy and 8point3 Energy Partners’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NextEra Energy $16.88 billion 4.17 $8.30 billion $8.73 17.17
8point3 Energy Partners N/A N/A N/A N/A N/A

NextEra Energy has higher revenue and earnings than 8point3 Energy Partners.

Volatility and Risk

NextEra Energy has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500. Comparatively, 8point3 Energy Partners has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for NextEra Energy and 8point3 Energy Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NextEra Energy 0 1 8 0 2.89
8point3 Energy Partners 2 9 3 0 2.07

NextEra Energy presently has a consensus target price of $151.11, suggesting a potential upside of 0.79%. 8point3 Energy Partners has a consensus target price of $15.54, suggesting a potential upside of 8.30%. Given 8point3 Energy Partners’ higher probable upside, analysts plainly believe 8point3 Energy Partners is more favorable than NextEra Energy.

Summary

NextEra Energy beats 8point3 Energy Partners on 9 of the 13 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.

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.

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