Is NextEra Energy, Inc.'s (NYSE:NEE) ROE Of 11% Impressive?

Simply Wall St.06-02

While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. To keep the lesson ...

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To keep the lesson ...</p>\n\n<a href=\"https://finance.yahoo.com/news/nextera-energy-inc-nyse-nee-110135356.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU1064131342.USD","symbol_name":"Fullerton Lux Funds - Global Absolute Alpha A Acc USD","start_time":0,"source_url":"https://finance.yahoo.com/news/nextera-energy-inc-nyse-nee-110135356.html","article_id":"2440140845","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/cN.LlIUoN3tMXpqeuiUx9A--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/88fedce06307b8d0a5a6b7fe29a1be66"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2440140845","pubTimestamp":1717326095,"columns":[],"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"While some investors are already well versed in financial metrics , this article is for those who would like to learn about Return On Equity  and why it is important. To keep the lesson grounded in practicality, we'll use ROE to better understand NextEra Energy, Inc. .Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. Put another way, it reveals the company's success at turning shareholder investments into profits.Return on Equity = Net Profit  ÷ Shareholders' Equity. So, based on the above formula, the ROE for NextEra Energy is:. Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have around the same level of debt to equity, and one has a higher ROE","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU1064131342.USD":"Fullerton Lux Funds - Global Absolute Alpha A Acc USD","LU0786609619.USD":"高盛全球千禧一代股票组合Acc","ROE":"ASTORIA US QUALITY KINGS ETF","IE00BD4GTW91.USD":"LEGG MASON CLEARBRIDGEINFRASTRUCTURE VALUE \"A\" (USDHDG) INC","LU2264538146.SGD":"Fullerton Lux Funds - Global Absolute Alpha A Acc SGD","LU0289739343.SGD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"A\" (SGD) ACC","NEEXU":"NextEra Energy, Inc.","IE00BD4GTV84.USD":"LEGG MASON CLEARBRIDGEINFRASTRUCTURE VALUE \"A\" (USDHDG) ACC","IE00BMG7P587.USD":"LEGG MASON CLEARBRIDGE GLOBAL INFRASTRUCTURE INCOM \"A\" (USD) INC","BK4585":"ETF&股票定投概念","LU1261432733.SGD":"Fidelity World A-ACC-SGD","LU1988902786.USD":"FULLERTON LUX FUNDS GLOBAL ABSOLUTE ALPHA \"I\" (USD) ACC","IE00BJTD4V19.USD":"NEUBERGER BERMAN US LONG SHORT EQUITY \"A1\" (USD) ACC","LU0312595415.SGD":"Schroder ISF Global Climate Change Equity A Acc SGD","LU1093756325.SGD":"FTIF - Franklin K2 Alt Strat Fd A (acc) SGD-H1","LU2637428348.USD":"NORDEA 1 GLOBAL SUSTAINABLE LISTED REAL ASSETS \"MP\" (USD) INC","LU1670628061.USD":"M&G (LUX) NORTH AMERICAN DIVIDEND \"A\" (USD) INC","IE00BD4GTT62.SGD":"Legg Mason ClearBridge Infrastructure Value A SGD-H (mdis) plus","BK4566":"资本集团","BK4081":"电力公用事业","NYSE":"纽交所","BK4533":"AQR资本管理(全球第二大对冲基金)","BK4588":"碎股","LU0124384867.USD":"贝莱德新能源基金A2","LU1670627923.USD":"M&G (LUX) NORTH AMERICAN DIVIDEND \"A\" (USD) ACC","LU1978683503.SGD":"Blackrock Sustainable Energy A2 SGD-H","BK4534":"瑞士信贷持仓","LU1093756168.USD":"FRANKLIN K2 ALTERNATIVE STRATEGIES \"A\" (USD) ACC","LU2384288077.EUR":"AZ EQUITY GLOBAL INFRASTRUCTURE \"A-INS\" (EUR) ACC","LU1621767737.EUR":"AZ EQUITY GLOBAL INFRASTRUCTURE \"AAZ\" (EUR) ACC","IE00BMG7P819.SGD":"Legg Mason ClearBridge - Global Infrastructure Income A Mdis SGD-H Plus","IE00BMG7P926.USD":"Legg Mason ClearBridge - Global Infrastructure Income A Acc USD","LU1621767810.EUR":"AZ EQUITY GLOBAL INFRASTRUCTURE \"A\" (EUR) INC","LU1621768206.USD":"AZ EQUITY GLOBAL INFRASTRUCTURE \"AAZ\" (USD) ACC","IE00BJTD4N35.SGD":"Neuberger Berman US Long Short Equity A1  Acc SGD-H","LU0511384066.AUD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"A\" (AUDHDG) ACC","LU1621768115.EUR":"AZ EQUITY GLOBAL INFRASTRUCTURE \"B\" (EUR) INC","LU0289961442.SGD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"AX\" (SGD) ACC","BK4581":"高盛持仓","NEE":"新纪元能源","IE00BMG7P694.USD":"Legg Mason ClearBridge - Global Infrastructure Income A Mdis USD Plus"},"translate_title":"NextEra Energy，Inc.(NYSE：NEE)11%的ROE令人印象深刻吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"ROE":1,"NYSE":1,"NEEXU":1,"NEE":1},"content_text":"While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. To keep the lesson grounded in practicality, we'll use ROE to better understand NextEra Energy, Inc. (NYSE:NEE). \n Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. Put another way, it reveals the company's success at turning shareholder investments into profits. \n View our latest analysis for NextEra Energy \n How Do You Calculate Return On Equity? \n The formula for return on equity is: \n Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity \nSo, based on the above formula, the ROE for NextEra Energy is:\n11% = US$6.4b ÷ US$59b (Based on the trailing twelve months to March 2024).\n The 'return' refers to a company's earnings over the last year. One way to conceptualize this is that for each $1 of shareholders' capital it has, the company made $0.11 in profit. \n Does NextEra Energy Have A Good ROE? \n One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. Pleasingly, NextEra Energy has a superior ROE than the average (8.9%) in the Electric Utilities industry. \n\n\n\n  NYSE:NEE Return on Equity June 2nd 2024\n \n\n That's clearly a positive. Bear in mind, a high ROE doesn't always mean superior financial performance. A higher proportion of debt in a company's capital structure may also result in a high ROE, where the high debt levels could be a huge risk .  Our risks dashboardshould have the 2 risks we have identified for NextEra Energy. \n Why You Should Consider Debt When Looking At ROE \n Virtually all companies need money to invest in the business, to grow profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the use of debt will improve the returns, but will not change the equity. That will make the ROE look better than if no debt was used. \n NextEra Energy's Debt And Its 11% ROE \n It's worth noting the high use of debt by NextEra Energy, leading to its debt to equity ratio of 1.35. The combination of a rather low ROE and significant use of debt is not particularly appealing. Debt does bring extra risk, so it's only really worthwhile when a company generates some decent returns from it. \n Summary \n Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE. \n But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. Profit growth rates, versus the expectations reflected in the price of the stock, are a particularly important to consider. So you might want to check this FREE visualization of analyst forecasts for the company. \n Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this  free list of interesting companies. \nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2440140845"}