NextEra Energy Stock Readies for Take Off on Solar Tariff News

The clean energy stock has held on to 9% of its gains in the past year

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NextEra Energy, Inc. (NYSE:NEE) is an American energy company valued at $157.5 billion. NEE owns Florida Power & Light Company, which is a vertically integrated electric utility business, and NextEra Energy Resources, which competes in the clean energy industry by generating renewable energy from the wind and sun. On June 6, NextEra Energy President and CEO, John Ketchum, issued a statement thanking the Biden administration following the announcement of a new two-year pause on solar tariffs.

NextEra Energy stock has increased about 9% year-over-year and is currently trading up 19% since bottoming at a 52-week low of $67.22. However, shares of NEE have dropped 13% year-to-date and are currently down 14% from their 52-week high of $93.73. Still, NextEra Energy stock has recovered 13% over the past month. NextEra Energy also offers a solid dividend yield of 2.06% with a forward dividend of $1.62. Capping the equity's most recent breakout attempt was the 160-day moving average.

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The energy company owes $59.69 billion in total debt and holds only $1.48 billion in cash on their balance sheet. In addition, NextEra Energy stock is overvalued by most valuation metrics, trading at a forward price-earnings ratio of 25.13 and a price-sales ratio of 8.56. Overall, NEE comes with too high of a risk level and not enough growth potential to justify its current stock price.

Options traders have favored calls of late, indicating a bullish penchant. Over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Generac stock's 50-day call/put volume ratio of 4.73 ranks higher than 92% of annual readings. This means long calls have been getting picked up at a quicker-than-usual pace in the last 10 weeks.

These traders are in luck, as the stock's Schaeffer's Volatility Scorecard (SVS) stands at a high 95 out of 100. This indicates NEE has exceeded options traders' volatility expectations over the past year.

 

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