NextEra Energy Partners, LP Common Units representing limited partner interests (NEP) Company Bio
NextEra Energy Partners LP acquires, owns, and operates contracted clean energy projects. It owns interests in wind and solar projects in North America. The company was founded in 2014 and is based in Juno Beach, Florida.
NEP Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for NextEra Energy Partners LP with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that NextEra Energy Partners LP ranked in the 66th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 144.67% on a DCF basis. The most interesting components of our discounted cash flow analysis for NextEra Energy Partners LP ended up being:
The company's debt burden, as measured by earnings divided by interest payments, is 0.73; that's higher than just 14.37% of US stocks in the Utilities sector that have positive free cash flow.
NextEra Energy Partners LP's weighted average cost of capital (WACC) is 12%; for context, that number is higher than 82.34% of tickers in our DCF set.
NextEra Energy Partners LP's effective tax rate, as measured by taxes paid relative to net income, is at 0 -- greater than only 0% of US stocks with positive free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
BIP, TAC, CWCO, GNE, and SPH can be thought of as valuation peers to NEP, in the sense that they are in the Utilities sector and have a similar price forecast based on DCF valuation.
Three dividend payers that look especially enticing right now are Brookfield Infrastructure Corporation (NYSE: BIPC), NextEra Energy (NYSE: NEE), and Waste Management (NYSE: WM). Master limited partnership (MLP) Brookfield Infrastructure Partners (NYSE: BIP) has been on a tear over the past decade. Its unit price -- MLP-speak for share price -- has appreciated 283% over the last 10 years, besting the S&P 500's 203.2% return.
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