NextEra Energy: The Dip Is A Buying Opportunity

Mark Bern, CFA Investing Group Follow Summary NextEra Energy is rated a BUY, trading at a 13% discount to its 52-week high and below estimated fair value. NEE’s planned acquisition of Dominion Energy is expected to be immediately accretive, boosting regulated revenue share to 80% and supporting robust EPS growth. I project NEE’s EPS to grow at 9% annually through 2031, with dividend increases averaging 8% per year continuing a 30-year streak of consecutive raises. Valuation models suggest a 10–19.6% expected CAGR over five years, with additional upside from P/E expansion and dividend reinvestment. Looking for a helping hand in the market? Members of Friedrich Global Research get exclusive ideas and guidance to navigate any climate. Learn More » pixinoo/iStock via Getty Images Introduction I look for companies that are selling at a discount to my estimated fair value and that have a history of paying a decent dividend that rises every year. I also look for companies that This article was written by Mark Bern, CFA 15.88K Followers Follow Founder of Bern Factor LLC, an independent research and publishing firm located in Virginia. Author of "Making Wall Street Irrelevant - Successful Investing Made Simple." I have more than 40 years of investing and analysis experience. I am a former CPA (1990 -2017) and became a CFA charter holder in 2000. I consider myself an expert in Quantitative and Qualitative analysis and have extensive experience in Technical Analysis. I also have a deep interest in stock market history and hold degrees in Economics (BS) and Management Information Systems (MBA). I have been actively involved with investment analysis since 1985 but have been a student of investing since the 1960s. I owned my first individual stock position while still in high school. I am a student of Benjamin Graham and Warren Buffett. I have achieved a uniquely diverse experience from multiple careers that has allowed me to develop a broad perspective enabling me to look at the big picture of macroeconomics all the way down to the detail of a retail unit or factory floor. In my youth I was in retail, then served in reconnaissance during my tours in Vietnam. I have been a blue collar, union worker in a factory and a manager in services, hospitality and transportation as well as a manager of professional staffs. I have more than 20 years of experience each in both the public and private sectors. I have personal points of reference that many analysts will never have. I bring more to the table than just the theories and models I have studied or built. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in NEE over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. DISCLAIMER: This analysis is not advice to buy or sell this or any stock; it is just pointing out an objective observation of unique patterns that developed from our research. Factual material is obtained from sources believed to be reliable, but the poster is not responsible for any errors or omissions, or for the results of actions taken based on information contained herein. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.