Home > Comparison > Utilities > NEE vs PEG
The strategic rivalry between NextEra Energy, Inc. and Public Service Enterprise Group Incorporated shapes the Utilities sector’s future. NextEra excels as a capital-intensive leader in renewable generation and transmission across North America. In contrast, Public Service Enterprise Group operates a diversified energy network focused on electric and gas distribution in the Northeast. This analysis aims to identify which company offers a superior risk-adjusted profile for portfolios seeking stable, regulated electric utilities exposure in 2026.
Table of contents
Companies Overview
NextEra Energy and Public Service Enterprise Group stand as pillars in the regulated electric utility sector.
NextEra Energy, Inc.: Clean Energy Leader
NextEra Energy dominates as a regulated electric utility in North America. It generates revenue through diverse electricity production, including wind, solar, nuclear, coal, and natural gas. Its strategic focus in 2021 emphasized expanding long-term contracted clean energy assets and battery storage projects, reinforcing its competitive edge in renewable generation.
Public Service Enterprise Group Incorporated: Regional Utility Powerhouse
Public Service Enterprise Group operates primarily in the Northeastern and Mid-Atlantic U.S. Its core revenue stems from electricity and gas transmission and distribution, alongside investments in solar generation and energy efficiency programs. In 2021, it prioritized enhancing its electric transmission and distribution infrastructure and expanding clean energy initiatives to support regional demand.
Strategic Collision: Similarities & Divergences
Both companies focus on regulated electric utilities with growing clean energy portfolios, but NextEra pushes a renewable-first growth strategy, while Public Service Enterprise Group balances traditional gas and electric distribution with incremental green investments. Their primary battleground lies in clean energy capacity expansion and grid modernization. NextEra profiles as a growth-oriented clean energy giant, whereas Public Service Enterprise Group offers a stable, regionally focused utility with diversification.
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) | Public Service Enterprise Group (PEG) |
|---|---|---|
| Revenue | 27.48B | 10.29B |
| Cost of Revenue | 10.22B | 6.75B |
| Operating Expenses | 8.98B | 1.19B |
| Gross Profit | 17.26B | 3.54B |
| EBITDA | 16.17B | 4.04B |
| EBIT | 9.10B | 2.67B |
| Interest Expense | 4.57B | 841M |
| Net Income | 6.83B | 1.77B |
| EPS | 3.31 | 3.56 |
| Fiscal Year | 2025 | 2024 |
Income Statement Analysis: The Bottom-Line Duel
The following income statement comparison exposes how each company’s financial engine drives growth and efficiency in a challenging market environment.
NextEra Energy, Inc. Analysis
NextEra Energy’s revenue surged from 17B in 2021 to 27.5B in 2025, with net income nearly doubling from 3.6B to 6.8B. It sustains strong gross margins around 63% and a net margin near 25%, showing robust profitability. Despite rising interest expenses, operating income climbed steadily, reflecting operational momentum and disciplined cost control.
Public Service Enterprise Group Incorporated Analysis
Public Service Enterprise Group’s revenue grew modestly from 9.6B in 2020 to 10.3B in 2024 but recently declined 8.4%. Net income fell from 1.9B in 2020 to 1.8B in 2024, pressured by shrinking gross margin (34.4%) and net margin (17.2%). EBIT dropped sharply last year, indicating margin erosion and weakening earnings momentum.
Growth Dominance vs. Margin Pressure
NextEra Energy clearly outperforms with superior revenue and net income growth, alongside higher and stable margins. Public Service Enterprise Group struggles with declining profits and compressed margins over the last year. For investors seeking growth backed by margin strength, NextEra’s profile offers a more compelling fundamental foundation.
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 compared below:
| Ratios | NextEra Energy, Inc. (NEE) | Public Service Enterprise Group (PEG) |
|---|---|---|
| ROE | 12.5% | 11.0% |
| ROIC | 4.2% | 4.4% |
| P/E | 24.5 | 23.7 |
| P/B | 3.07 | 2.61 |
| Current Ratio | 0.60 | 0.65 |
| Quick Ratio | 0.49 | 0.48 |
| D/E (Debt-to-Equity) | 1.75 | 1.42 |
| Debt-to-Assets | 45.0% | 41.9% |
| Interest Coverage | 1.81 | 2.80 |
| Asset Turnover | 0.13 | 0.19 |
| Fixed Asset Turnover | 0.18 | 0.26 |
| Payout Ratio | 68.5% | 67.5% |
| Dividend Yield | 2.79% | 2.84% |
| Fiscal Year | 2025 | 2024 |
Efficiency & Valuation Duel: The Vital Signs
Financial ratios act as the company’s DNA, exposing hidden risks and showcasing operational excellence through profitability and valuation metrics.
NextEra Energy, Inc.
NextEra exhibits a neutral 12.5% ROE with a robust 24.9% net margin, signaling solid profitability. Its P/E ratio of 24.5 suggests fair valuation but a stretched price-to-book of 3.07 raises caution. The 2.79% dividend yield rewards shareholders while the company balances growth with moderate reinvestment.
Public Service Enterprise Group Incorporated
Public Service Enterprise Group posts a neutral 11.0% ROE and a healthy 17.2% net margin, indicating decent profitability. Valuations stand neutral with a P/E of 23.7 and a price-to-book of 2.61, reflecting a more conservative market stance. It offers a 2.84% dividend yield, maintaining steady shareholder returns with stable capital allocation.
Balanced Profitability vs. Valuation Discipline
NextEra Energy commands a premium in valuation but delivers superior net margins. Public Service Enterprise Group maintains a more conservative valuation and comparable dividend yield. Investors seeking operational strength with a slightly higher risk may prefer NextEra, while those favoring valuation discipline might lean toward Public Service Enterprise Group.
Which one offers the Superior Shareholder Reward?
NextEra Energy (NEE) delivers a balanced distribution with a 2.79% dividend yield and a 68% payout ratio, complemented by modest buybacks. Public Service Enterprise Group (PEG) offers a slightly higher 2.84% yield with a 67% payout but weaker free cash flow coverage and negative buyback impact. I see NEE’s stable free cash flow and prudent capital allocation as more sustainable. PEG’s aggressive dividends amid free cash flow deficits risk long-term value. Thus, I conclude NEE offers a superior total shareholder return profile for 2026 investors.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and trade-offs of NextEra Energy and Public Service Enterprise Group, highlighting their financial strengths and weaknesses:
Both companies share identical scores across DCF, ROE, ROA, Debt/Equity, and valuation metrics, indicating a balanced yet moderate financial profile. Neither firm excels in discounted cash flow valuation, signaling possible overvaluation risks. They both demonstrate favorable returns on equity and assets but carry moderate leverage and valuation scores. This parity suggests no clear edge; investors should weigh other factors beyond these scores.
Bankruptcy Risk: Solvency Showdown
NextEra Energy’s Altman Z-Score of 1.20 trails slightly behind Public Service Enterprise Group’s 1.32, both firmly in the distress zone:
These low scores warn of elevated bankruptcy risk for both firms amid current market volatility. Historically, utilities maintain steady cash flow, but these Altman Z-Scores reflect fragile solvency and heightened sensitivity to economic downturns. Caution is warranted for long-term holders.
Financial Health: Quality of Operations
NextEra Energy and Public Service Enterprise Group both earn a Piotroski F-Score of 7, signifying strong financial health:
Scores near 7 indicate solid profitability, liquidity, and operational efficiency. Neither company raises red flags in internal metrics, reflecting robust management execution. This strength partially offsets their solvency concerns, but investors should monitor for any deterioration.
How are the two companies positioned?
This section dissects the operational DNA of NEE and PEG by comparing their revenue distribution by segment alongside their internal strengths and weaknesses. The goal is to confront their economic moats and determine which business model delivers the most resilient, sustainable competitive advantage today.
Revenue Segmentation: The Strategic Mix
This visual comparison dissects how NextEra Energy, Inc. and Public Service Enterprise Group diversify their income streams and where their primary sector bets lie:
NextEra Energy anchors its revenue in Florida Power & Light Company with $17B in 2024, complemented by a $7.5B NEER segment, showing moderate diversification. In contrast, Public Service Enterprise Group presents a more balanced spread: its largest segment, Public Service Electric and Gas, generates $4B, while Gas Distribution ($2.1B) and Transmission ($1.75B) segments contribute significantly. NextEra’s reliance on a dominant utility segment poses concentration risk, while PSEG’s diversified portfolio mitigates it through varied infrastructure revenues.
Strengths and Weaknesses Comparison
This table compares the strengths and weaknesses of NextEra Energy, Inc. (NEE) and Public Service Enterprise Group Incorporated (PEG):
NEE Strengths
- Higher net margin at 24.87% indicating strong profitability
- Favorable WACC at 6.52% supports efficient capital use
- Larger revenue from diversified segments like Florida Power & Light and NEER
- Dividend yield at 2.79% supports income investors
PEG Strengths
- Favorable net margin at 17.22% shows solid profitability
- Lower WACC at 5.48% implies cheaper capital costs
- Diverse revenue streams across natural gas, transmission, and contracts
- Dividend yield slightly higher at 2.84% benefits income focus
NEE Weaknesses
- Unfavorable ROIC at 4.23% below WACC suggests weak capital returns
- Low current and quick ratios below 1 signal liquidity risks
- High debt-to-equity ratio of 1.75 increases financial leverage
- Unfavorable asset turnover ratios imply inefficiency in asset use
- Higher PB ratio at 3.07 may indicate valuation concerns
PEG Weaknesses
- ROIC at 4.4% also below WACC highlights capital return challenges
- Current and quick ratios under 1 raise liquidity concerns
- Debt-to-equity at 1.42 still high but less leveraged than NEE
- Asset turnover ratios unfavorable, indicating operational inefficiency
- Interest coverage neutral but weaker than ideal for safety
NextEra Energy shows stronger profitability and diversification but faces significant liquidity and capital efficiency challenges. PEG offers more balanced capital costs and income yield but shares similar operational inefficiencies and liquidity risks. Both must address returns on invested capital to enhance long-term value.
The Moat Duel: Analyzing Competitive Defensibility
A structural moat is the only true shield against profit erosion from competition over the long term. Let’s examine how these two utilities defend their turf:
NextEra Energy, Inc. (NEE): Innovation-Driven Renewable Moat
NEE’s competitive edge lies in intangible assets and cost advantages from renewable investments. Its margins remain robust despite shedding value, with a rising ROIC hinting at future strength. Expansion in battery storage and transmission could deepen its moat in 2026.
Public Service Enterprise Group Incorporated (PEG): Traditional Utility Backbone
PEG relies on network effects through regulated electric and gas infrastructure, contrasting NEE’s renewables focus. Its steady, though value-destroying, ROIC growth signals operational resilience. Opportunities in solar projects and energy efficiency programs may boost its positioning.
Renewable Innovation vs. Infrastructure Network: The Moat Showdown
NEE’s intangible asset-driven moat is deeper, fueled by innovation and margin stability. PEG’s infrastructure moat is wider but less profitable. I see NEE better equipped to defend market share amid evolving energy trends.
Which stock offers better returns?
Both NextEra Energy, Inc. and Public Service Enterprise Group Incorporated show significant price movements over the past year, with distinct trading dynamics reflecting their respective market performances.
Trend Comparison
NextEra Energy, Inc. exhibits a bullish trend with a 47.84% price increase over the past 12 months, showing acceleration and a high volatility of 6.34. Its peak price reached 88.82, with a low of 60.08.
Public Service Enterprise Group Incorporated also posts a bullish trend with a 27.88% price increase over the same period, but with deceleration and slightly lower volatility at 6.1. Its highest price was 94.3, while the lowest was 63.78.
NextEra Energy, Inc. outperformed Public Service Enterprise Group with a stronger price gain and accelerating momentum, delivering the highest market performance over the past year.
Target Prices
Analysts present a cautiously optimistic consensus for NextEra Energy and Public Service Enterprise Group.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| NextEra Energy, Inc. (NEE) | 84 | 104 | 93.09 |
| Public Service Enterprise Group (PEG) | 81 | 98 | 88.67 |
The target consensus for NEE sits about 5% above its current price of 88.82, signaling moderate upside potential. PEG’s consensus target exceeds its 81.56 price by nearly 9%, suggesting more room for appreciation. Both stocks reflect steady confidence in regulated utilities amid market stability.
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How do institutions grade them?
The following tables present the latest institutional grades for NextEra Energy, Inc. and Public Service Enterprise Group Incorporated:
NextEra Energy, Inc. Grades
This table summarizes recent grades assigned by leading financial institutions to 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 |
Public Service Enterprise Group Incorporated Grades
Below are the recent grades from reputable institutions for Public Service Enterprise Group Incorporated.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Barclays | maintain | Equal Weight | 2026-01-22 |
| JP Morgan | downgrade | Neutral | 2026-01-22 |
| Wells Fargo | upgrade | Overweight | 2026-01-20 |
| Ladenburg Thalmann | upgrade | Buy | 2026-01-07 |
| UBS | maintain | Buy | 2025-12-17 |
| JP Morgan | maintain | Overweight | 2025-12-12 |
| Jefferies | upgrade | Buy | 2025-11-06 |
| TD Cowen | maintain | Buy | 2025-11-05 |
| BMO Capital | maintain | Market Perform | 2025-11-04 |
| Barclays | maintain | Equal Weight | 2025-10-21 |
Which company has the best grades?
NextEra Energy, Inc. consistently earns positive ratings like Buy and Outperform from top firms. Public Service Enterprise Group shows mixed upgrades and downgrades, with some Buy ratings but also Neutral and Equal Weight grades. This suggests NextEra currently holds stronger institutional confidence, potentially influencing investor sentiment and portfolio positioning.
Risks specific to each company
The following categories identify critical pressure points and systemic threats facing NextEra Energy, Inc. and Public Service Enterprise Group Incorporated in the 2026 market environment:
1. Market & Competition
NextEra Energy, Inc.
- Dominates with extensive renewable assets but faces rising competition in clean energy markets.
Public Service Enterprise Group Incorporated
- Strong regional presence in Northeast but limited scale compared to NextEra’s coast-to-coast reach.
2. Capital Structure & Debt
NextEra Energy, Inc.
- High debt-to-equity (1.75) and low interest coverage (1.99x) signal leverage stress.
Public Service Enterprise Group Incorporated
- Lower debt-to-equity (1.42) and moderate interest coverage (3.17x) indicate relatively better financial stability.
3. Stock Volatility
NextEra Energy, Inc.
- Beta of 0.76 suggests moderate volatility, typical for regulated utilities.
Public Service Enterprise Group Incorporated
- Slightly lower beta at 0.62 indicates marginally less stock price fluctuation.
4. Regulatory & Legal
NextEra Energy, Inc.
- Regulatory risks from expanding clean energy mandates and nuclear operations.
Public Service Enterprise Group Incorporated
- Exposure to stringent Northeast regulatory environment with evolving gas and electric regulations.
5. Supply Chain & Operations
NextEra Energy, Inc.
- Complex operations across multiple energy sources may strain supply chain resilience.
Public Service Enterprise Group Incorporated
- More focused utility operations may reduce operational complexity and supply chain risks.
6. ESG & Climate Transition
NextEra Energy, Inc.
- Leads with aggressive clean energy projects but faces transition execution risks.
Public Service Enterprise Group Incorporated
- Progressing in solar and efficiency programs but lags behind NextEra in scale and innovation.
7. Geopolitical Exposure
NextEra Energy, Inc.
- Primarily US-focused with minimal direct geopolitical risks.
Public Service Enterprise Group Incorporated
- Similar US-centric profile with concentration in politically stable Northeastern states.
Which company shows a better risk-adjusted profile?
NextEra’s most impactful risk is its heavy leverage and weak interest coverage, raising default concerns despite growth prospects. PEG’s key risk lies in regional regulatory constraints that may limit expansion. PEG’s lower financial leverage and better coverage offer a more balanced risk-reward profile. Notably, both firms fall in the Altman Z-score distress zone, but PEG’s slightly higher score and moderate debt profile justify my caution.
Final Verdict: Which stock to choose?
NextEra Energy’s superpower lies in its capacity to drive robust income growth with a strong gross margin and consistent profitability. However, its heavy leverage and weak liquidity ratios remain points of vigilance. It suits investors aiming for aggressive growth exposure in the evolving energy sector.
Public Service Enterprise Group offers a strategic moat through stable regulated utility operations, delivering steady dividends and comparatively safer balance sheet metrics. While growth is modest, it fits portfolios seeking GARP—balancing growth with reasonable valuation and lower volatility.
If you prioritize growth with an appetite for operational complexity and financial leverage, NextEra Energy outshines due to its accelerating revenue and income trends despite some financial strain. However, if you seek better stability and income reliability with moderate growth, Public Service Enterprise Group offers a safer profile and steadier cash flow. Both carry risks typical of utilities, emphasizing the need for careful risk assessment.
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 Public Service Enterprise Group Incorporated to enhance your investment decisions:
