Home > Comparison > Utilities > NEE vs ED
The strategic rivalry between NextEra Energy, Inc. and Consolidated Edison, Inc. defines the current trajectory of the regulated electric utilities sector. NextEra operates as a capital-intensive clean energy innovator with a broad generation portfolio, while Consolidated Edison focuses on regulated electric, gas, and steam delivery in dense urban markets. This analysis will explore which company’s operational model offers the superior risk-adjusted return for a diversified portfolio seeking stability and growth.
Table of contents
Companies Overview
NextEra Energy and Consolidated Edison stand as pillars in the regulated electric utilities sector, shaping energy delivery across key U.S. regions.
NextEra Energy, Inc.: Leader in Clean Energy Generation
NextEra Energy dominates as a regulated electric utility with a diversified generation portfolio including wind, solar, nuclear, and natural gas. Its revenue flows from selling electricity to retail and wholesale customers across North America. In 2021, it sharpened its strategic focus on expanding renewable energy assets and battery storage projects, reinforcing its position in clean energy innovation.
Consolidated Edison, Inc.: Essential Urban Energy Provider
Consolidated Edison excels as a regulated utility delivering electric, gas, and steam services primarily in New York City and Westchester County. Its core revenue derives from supplying electricity and gas to millions of urban customers. The company’s 2021 strategy prioritized maintaining and upgrading its extensive urban energy infrastructure while investing in renewable projects and transmission enhancements.
Strategic Collision: Similarities & Divergences
Both companies operate regulated utilities but contrast sharply in scope and strategy. NextEra prioritizes a clean energy growth model with broad geographic reach, while Consolidated Edison focuses on dense urban infrastructure and diversified energy delivery. Their primary battleground lies in evolving energy markets and regulatory landscapes. Investors will find distinct profiles: NextEra’s growth through innovation and scale versus Consolidated Edison’s stability anchored in regulated urban utilities.
Income Statement Comparison
This data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | NextEra Energy, Inc. (NEE) | Consolidated Edison, Inc. (ED) |
|---|---|---|
| Revenue | 27.5B | 15.3B |
| Cost of Revenue | 10.2B | 5.5B |
| Operating Expenses | 9.0B | 7.0B |
| Gross Profit | 17.3B | 9.8B |
| EBITDA | 16.2B | 5.5B |
| EBIT | 9.1B | 3.3B |
| Interest Expense | 4.6B | 1.2B |
| Net Income | 6.8B | 1.8B |
| EPS | 3.31 | 5.26 |
| Fiscal Year | 2025 | 2024 |
Income Statement Analysis: The Bottom-Line Duel
This income statement comparison reveals which company operates with greater efficiency and delivers superior profitability.
NextEra Energy, Inc. Analysis
NextEra Energy’s revenue grew steadily from 17B in 2021 to 27.5B in 2025, with net income nearly doubling from 3.6B to 6.8B over the same span. Its gross margin holds firm at 62.8%, underpinning a robust 24.9% net margin despite rising interest expenses. However, recent EPS dipped slightly, indicating margin pressure amid growth.
Consolidated Edison, Inc. Analysis
Consolidated Edison posted moderate revenue growth from 12.2B in 2020 to 15.3B in 2024, while net income more than doubled from 1.1B to 1.8B. It maintains a healthy gross margin near 64%, but a lower 11.9% net margin reflects higher operating costs. The 2024 EPS contracted by over 27%, signaling short-term profitability challenges.
Margin Muscle vs. Growth Scale
NextEra Energy outpaces Consolidated Edison with nearly triple the revenue and a stronger net margin, reflecting superior operating leverage. Although Consolidated Edison shows respectable growth and stable margins, NextEra’s scale and efficient cost control position it as the clear income statement leader. Investors seeking robust earnings momentum may find NextEra’s profile more compelling.
Financial Ratios Comparison
These vital ratios act as a diagnostic tool to expose the underlying fiscal health, valuation premiums, and capital efficiency of the companies analyzed:
| Ratios | NextEra Energy, Inc. (NEE) | Consolidated Edison, Inc. (ED) |
|---|---|---|
| ROE | 13.86% | 8.29% |
| ROIC | 4.04% | 3.48% |
| P/E | 21.2 | 16.96 |
| P/B | 2.94 | 1.41 |
| Current Ratio | 0.47 | 1.04 |
| Quick Ratio | 0.38 | 0.96 |
| D/E | 1.64 | 1.27 |
| Debt-to-Assets | 43.3% | 39.4% |
| Interest Coverage | 3.35 | 2.30 |
| Asset Turnover | 0.13 | 0.22 |
| Fixed Asset Turnover | 0.18 | 0.29 |
| Payout ratio | 61.0% | 60.4% |
| Dividend yield | 2.87% | 3.56% |
| Fiscal Year | 2024 | 2024 |
Efficiency & Valuation Duel: The Vital Signs
Financial ratios act as a company’s DNA, exposing hidden risks and signaling operational excellence or weaknesses to investors.
NextEra Energy, Inc.
NextEra posts a solid 13.9% ROE with a strong 28.1% net margin, reflecting profitability. Its P/E of 21.2 and P/B near 3 suggest a fairly valued stock, though capital efficiency lags behind sector norms. A 2.9% dividend yield rewards shareholders, balancing reinvestment needs amid a slightly stretched balance sheet.
Consolidated Edison, Inc.
Consolidated Edison’s ROE at 8.3% trails NextEra, matched with a leaner 11.9% net margin. The stock trades at a P/E of 17.0 and a P/B of 1.4, indicating more modest valuation multiples. A higher 3.6% dividend yield underscores shareholder income focus, supported by a healthier current ratio and moderate leverage.
Balanced Profitability Meets Valuation Discipline
NextEra offers superior profitability but weaker capital efficiency and liquidity, while Consolidated Edison provides steadier balance sheet metrics and a higher dividend yield. Investors seeking growth with income may favor NextEra’s profile; those prioritizing stability and income might lean toward Consolidated Edison.
Which one offers the Superior Shareholder Reward?
I compare NextEra Energy (NEE) and Consolidated Edison (ED) on dividends and buybacks. NEE yields 2.87% with a 61% payout ratio, supported by steady free cash flow of 2.3B in 2024. ED delivers a higher yield at 3.56%, but with a similar 60% payout ratio and negative free cash flow of -3.3B, signaling distribution strain. Both companies maintain buyback programs, though NEE’s capital allocation favors reinvestment in growth, while ED’s aggressive dividend amid negative free cash flow raises sustainability concerns. I find NEE’s balanced approach offers a more durable total return profile in 2026.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and trade-offs of NextEra Energy, Inc. and Consolidated Edison, Inc., highlighting their distinct financial strengths and weaknesses:
NextEra Energy scores higher on profitability metrics, boasting superior ROE and ROA scores (4 vs. 3 each), indicating more efficient asset and equity utilization. Both firms share weak DCF scores (1), signaling overvaluation risks. Debt-to-equity is moderate and equal (2), reflecting balanced leverage. Consolidated Edison edges out slightly in price-to-book valuation (3 vs. 2), suggesting a marginally better market price relative to book value. Overall, NextEra presents a more balanced operational profile, while Consolidated Edison relies more on valuation metrics.
Bankruptcy Risk: Solvency Showdown
Both companies sit precariously in the distress zone with Altman Z-Scores near 1.2, signaling elevated bankruptcy risk during this economic cycle:
This similarity warns investors of potential solvency challenges ahead. Neither firm currently demonstrates a strong buffer against financial distress, demanding cautious portfolio positioning.
Financial Health: Quality of Operations
Consolidated Edison leads with a Piotroski F-Score of 7, indicating strong internal financial health, while NextEra’s score of 6 remains average but less robust:
Consolidated Edison’s stronger operational metrics suggest better profitability, liquidity, and efficiency, whereas NextEra’s slightly weaker score flags potential internal red flags. This gap highlights Consolidated Edison’s superior financial quality in current conditions.
How are the two companies positioned?
This section dissects the operational DNA of NextEra Energy and Consolidated Edison by comparing their revenue distribution and internal dynamics. The aim is to confront their economic moats to identify which model offers the most resilient competitive advantage today.
Revenue Segmentation: The Strategic Mix
The following visual comparison dissects how NextEra Energy and Consolidated Edison diversify their income streams and where their primary sector bets lie:
NextEra Energy anchors its revenue in the Florida Power & Light Company at $17B in 2024, with a significant $7.5B from its NEER segment, showing a moderately diversified energy portfolio. Consolidated Edison relies heavily on Electricity at $10.8B in 2023, but supplements with Oil and Gas Purchased ($3.1B) and Steam ($569M), reflecting a broader utility mix. NextEra’s focus signals strong infrastructure dominance, while Consolidated Edison’s spread reduces concentration risk.
Strengths and Weaknesses Comparison
This table compares the Strengths and Weaknesses of NextEra Energy, Inc. and Consolidated Edison, Inc.:
NextEra Energy, Inc. Strengths
- High net margin at 28.06%
- Favorable WACC at 6.4%
- Strong dividend yield at 2.87%
- Large revenue from Florida Power & Light segment
Consolidated Edison, Inc. Strengths
- Favorable net margin at 11.93%
- Lower WACC at 4.78%
- Favorable price-to-book at 1.41
- Higher dividend yield at 3.56%
NextEra Energy, Inc. Weaknesses
- Low current and quick ratios below 0.5
- High debt-to-equity at 1.64
- Interest coverage near 2x weak
- ROIC at 4.04% below WACC
- Low asset and fixed asset turnover
Consolidated Edison, Inc. Weaknesses
- ROE at 8.29% unfavorable
- ROIC below WACC at 3.48%
- Debt-to-equity 1.27 unfavorable
- Asset and fixed asset turnover weak
- Interest coverage neutral but not strong
NextEra shows higher profitability but struggles with liquidity and capital efficiency. Consolidated Edison presents better liquidity and capital structure but lower returns. Each faces challenges balancing growth with financial stability.
The Moat Duel: Analyzing Competitive Defensibility
A structural moat shields long-term profits from relentless competition erosion. Without it, profitability is at constant risk:
NextEra Energy, Inc.: Innovation-Driven Clean Energy Moat
NextEra leverages intangible assets and regulatory positioning. Its robust margins (33% EBIT) reflect operational efficiency. However, declining ROIC signals looming profitability pressure in 2026 from rising capital costs.
Consolidated Edison, Inc.: Regulated Utility Stability Moat
ConEd’s moat relies on stable regulated returns and asset scale in dense urban markets. Despite a lower EBIT margin (22%), it maintains reliable cash flow. Yet, its shrinking ROIC trend suggests challenges in sustaining capital efficiency.
Innovation vs. Regulation: Who Defends the Future Better?
Both firms face declining ROIC, destroying value and signaling weak moats. Still, NextEra’s innovation in renewables offers a deeper moat potential versus ConEd’s traditional regulated model. I see NextEra better positioned to defend market share amid energy transition pressures.
Which stock offers better returns?
The past year shows marked price gains for both stocks, with NextEra Energy surging early and Consolidated Edison accelerating later, reflecting distinct trading dynamics and momentum shifts.
Trend Comparison
NextEra Energy’s stock rose 52.05% over 12 months, marking a bullish trend with decelerating momentum and a high-low range between 57.81 and 87.9. Recent gains slowed to 4.79%.
Consolidated Edison gained 18.32% over the same period, also bullish but with accelerating momentum. Its price ranged from 88.15 to 112.1. Recent gains slightly outpaced NextEra at 4.89%.
NextEra Energy delivered the highest total return over the year, despite slower recent momentum compared to Consolidated Edison’s accelerating trend.
Target Prices
Analysts present a clear consensus on target prices for NextEra Energy and Consolidated Edison.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| NextEra Energy, Inc. | 84 | 104 | 93.09 |
| Consolidated Edison, Inc. | 86 | 166 | 110.63 |
The target consensus for NextEra Energy sits modestly above its current price of 87.9, suggesting moderate upside. Consolidated Edison’s consensus target exceeds its current price of 106.63, signaling greater expected appreciation.
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How do institutions grade them?
The following tables summarize the recent grades assigned to each company by major financial institutions:
NextEra Energy, Inc. Grades
Here are the recent grades from leading analysts for NextEra Energy, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Mizuho | Maintain | Neutral | 2026-01-28 |
| Argus Research | Maintain | Buy | 2026-01-28 |
| BMO Capital | Maintain | Outperform | 2026-01-27 |
| Wells Fargo | Maintain | Overweight | 2026-01-20 |
| Barclays | Maintain | Equal Weight | 2026-01-15 |
| Jefferies | Maintain | Hold | 2025-12-31 |
| UBS | Maintain | Buy | 2025-12-17 |
| JP Morgan | Maintain | Overweight | 2025-12-11 |
| BMO Capital | Maintain | Outperform | 2025-12-10 |
| UBS | Maintain | Buy | 2025-12-10 |
Consolidated Edison, Inc. Grades
Here are the recent grades from leading analysts for Consolidated Edison, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| UBS | Maintain | Neutral | 2026-01-23 |
| Barclays | Maintain | Underweight | 2026-01-22 |
| Wells Fargo | Maintain | Equal Weight | 2026-01-20 |
| UBS | Maintain | Neutral | 2026-01-07 |
| UBS | Maintain | Neutral | 2025-12-17 |
| JP Morgan | Maintain | Underweight | 2025-12-12 |
| Keybanc | Maintain | Underweight | 2025-12-12 |
| Barclays | Maintain | Underweight | 2025-11-10 |
| Barclays | Maintain | Underweight | 2025-10-22 |
| Morgan Stanley | Maintain | Underweight | 2025-10-22 |
Which company has the best grades?
NextEra Energy consistently earns positive ratings such as Buy, Outperform, and Overweight. Consolidated Edison mostly receives Neutral to Underweight grades. This divergence may influence investor sentiment and capital allocation decisions.
Risks specific to each company
The following categories identify critical pressure points and systemic threats facing both firms in the 2026 market environment:
1. Market & Competition
NextEra Energy, Inc.
- Faces increasing competition in renewable energy markets, pressuring margins despite strong net margin of 28%.
Consolidated Edison, Inc.
- Operates in a mature, regulated market with stable demand but limited growth, reflected in a modest net margin of 11.9%.
2. Capital Structure & Debt
NextEra Energy, Inc.
- High debt-to-equity ratio of 1.64 and weak interest coverage at 1.99 signal financial strain and refinancing risk.
Consolidated Edison, Inc.
- Slightly better leverage with debt-to-equity at 1.27 and interest coverage of 2.8, but still moderate risk for utilities.
3. Stock Volatility
NextEra Energy, Inc.
- Exhibits moderate volatility with beta 0.73, implying some sensitivity to market swings.
Consolidated Edison, Inc.
- Lower volatility with beta 0.38, reflecting defensive characteristics and less market sensitivity.
4. Regulatory & Legal
NextEra Energy, Inc.
- Exposure to evolving renewable energy policies creates regulatory uncertainty but offers growth opportunities.
Consolidated Edison, Inc.
- Faces strict regulatory scrutiny in New York markets, increasing compliance costs and potential legal risks.
5. Supply Chain & Operations
NextEra Energy, Inc.
- Complex operations across multiple energy sources risk supply disruptions and cost overruns.
Consolidated Edison, Inc.
- Operational focus on electricity, gas, and steam delivery in a dense urban market reduces supply chain complexity.
6. ESG & Climate Transition
NextEra Energy, Inc.
- Leading in clean energy assets but faces capital intensity and execution risk in climate transition projects.
Consolidated Edison, Inc.
- Moderate ESG risk with ongoing investments in renewable infrastructure amid regulatory pressure for sustainability.
7. Geopolitical Exposure
NextEra Energy, Inc.
- Primarily domestic US exposure limits geopolitical risk but vulnerable to federal policy shifts.
Consolidated Edison, Inc.
- Concentrated in New York metro area, less geopolitical risk but sensitive to local political and regulatory changes.
Which company shows a better risk-adjusted profile?
NextEra’s largest risk is its strained capital structure and weak liquidity, heightening refinancing concerns. Consolidated Edison faces significant regulatory and legal risks in its urban utility operations. ED’s lower volatility and stronger Piotroski score suggest a more stable risk-adjusted profile. Notably, NEE’s Altman Z-score in distress zone highlights its financial vulnerability despite robust margins. Overall, ED offers a more balanced risk-reward profile for cautious investors in 2026.
Final Verdict: Which stock to choose?
NextEra Energy, Inc. (NEE) stands out with its superpower in delivering strong top-line growth and robust income statement improvements. Its aggressive capital expenditures fuel expansion, but the stretched liquidity ratios warrant vigilance. It suits investors chasing aggressive growth and willing to accept short-term financial risks.
Consolidated Edison, Inc. (ED) benefits from a durable strategic moat grounded in regulated utility operations and steady dividend yield. It offers relatively better liquidity and balance sheet stability than NEE, making it attractive for investors seeking lower volatility and reliable income. It fits well within GARP (Growth at a Reasonable Price) portfolios.
If you prioritize dynamic growth and can tolerate liquidity constraints, NextEra Energy might be the compelling choice due to its powerful revenue momentum and income strength. However, if you seek more stability and dependable income with a defensive profile, Consolidated Edison offers better balance sheet resilience and a conservative growth trajectory. Both present analytical scenarios for different investor appetites amid sector challenges.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of NextEra Energy, Inc. and Consolidated Edison, Inc. to enhance your investment decisions:
