NEE vs AEP: Renewable Energy Leader vs Regulated Transmission Backbone: AI Score, Valuation, Performance and Upside
NextEra Energy is the premium utility stock combining regulated Florida utility earnings with the world's largest renewable energy development platform. American Electric Power offers the nation's largest transmission network with steady rate base growth and a higher dividend yield. NEE is the growth-oriented utility with clean energy optionality; AEP is the infrastructure-focused income play with transmission scale advantages.
This NEE vs AEP comparison highlights two different approaches to utility investing: NextEra's dual-platform growth model powered by renewable energy, and AEP's infrastructure-first strategy anchored by the nation's largest transmission grid. The right choice depends on whether you prioritize growth or yield.
AEP holds the edge across 3 of 5 key metrics in this comparison. AEP leads on both 1-year return (+4.86%) and forward P/E quality (17.99x vs 18.65x for NEE), a relatively favorable combination of momentum and valuation. NEE leads on both revenue growth (12.40%) and operating margin (31.52%), suggesting a stronger fundamental setup on both dimensions. Analyst consensus implies meaningfully more upside for NEE (+20.22%) than for AEP (+16.76%).
Human Wall Street analysts' price targets, typically implying a ~12-month view — a separate signal from this site's own AI Prediction Signal further down the page, which is a 5-/30-day machine-learning forecast based on price history alone.
- Want the largest renewable energy growth platform in the utility sector within a single stock
- Prefer a dual-model utility combining regulated earnings stability with competitive clean energy upside
- Believe wind, solar, and energy storage development will drive above-peer earnings and dividend growth
- Are willing to accept a premium valuation for a utility with a differentiated growth profile
- Want exposure to the nation's largest transmission network — a critical, long-lived infrastructure asset
- Prefer a higher current dividend yield around 3.4% versus NEE's lower yield near 2.6%
- Value the predictability of a pure regulated utility model without competitive generation exposure
- Believe transmission and distribution investment will be a durable growth driver as the grid modernizes
| Metric | NEE | AEP |
|---|---|---|
| AI scorei | 50.1 | 51.0 |
| AI ranki | #473 | #432 |
| Latest closei | $78.96 | $124.29 |
| 1M returni | -2.60% | +3.05% |
| 3M returni | -11.63% | -6.64% |
| 6M returni | -14.02% | -7.63% |
| 1Y returni | -7.96% | +4.86% |
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | NEE | AEP |
|---|---|---|
| 1Y ago | $9.28K (-7.2%) started 2025-10-16 | $10.58K (+5.8%) started 2025-10-16 |
| 5Y ago | $11.72K (+17.2%) started 2021-10-18 | $20.04K (+100.4%) started 2021-10-18 |
| 10Y ago | $39.77K (+297.7%) started 2016-10-17 | $38.73K (+287.3%) started 2016-10-17 |
Hypothetical — past performance does not guarantee future results.
| Metric | NEE | AEP |
|---|---|---|
| Market capi | $170.72B | $67.14B |
| Trailing P/Ei | 18.39 | 21.37 |
| Forward P/Ei | 18.65 | 17.99 |
| Price/Salesi | 5.88 | N/A |
| EV/Revenuei | 10.07 | 5.32 |
| Analyst targeti | $98.39 | $144.00 |
| Target upsidei | +20.22% | +16.76% |
| Metric | NEE | AEP |
|---|---|---|
| Revenue growthi | 12.40% | 7.00% |
| Earnings growthi | 53.10% | -43.20% |
| EPS growthi | +53.10% | -43.20% |
| FCF margini | -61.91% | -26.31% |
| Operating margini | 31.52% | 23.25% |
| Profit margini | 32.40% | 13.78% |
| ROIC proxyi | 11.68% | 10.13% |
| Return on equityi | 11.68% | 10.13% |
| Dividend yieldi | 3.05% | 3.08% |
| Payout ratioi | 53.47% | 65.51% |
| Dividend growth streaki | No increase yet | No increase yet |
| Betai | 0.65 | 0.50 |
| Debt/equityi | 161.68 | 160.79 |
| Current ratioi | 0.53 | 0.50 |
| Quick ratioi | 0.35 | 0.28 |
Over the past year, NEE and AEP have moved moderately in the same direction (correlation of 0.49), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | NEE | AEP |
|---|---|---|---|
| 1Y | Growthi | -7.16% | +5.75% |
| CAGRi | -7.17% | +5.76% | |
| Volatilityi | 20.60% | 18.87% | |
| Sharpe ratioi | -0.48 | 0.15 | |
| Sortino ratioi | -0.66 | 0.22 | |
| Max drawdowni | 22.87% | 15.23% | |
| Current drawdowni | 19.33% | 10.38% | |
| Avg drawdowni | 7.64% | 5.07% | |
| Ulcer Indexi | 9.79% | 6.51% | |
| Max daily dropi | 4.63% | 3.79% | |
| Max wkly dropi | 6.96% | 5.95% | |
| 5Y | Growthi | +6.70% | +72.46% |
| CAGRi | +1.31% | +11.53% | |
| Volatilityi | 26.82% | 20.14% | |
| Sharpe ratioi | 0.02 | 0.42 | |
| Sortino ratioi | 0.02 | 0.60 | |
| Max drawdowni | 44.97% | 29.56% | |
| Current drawdowni | 19.33% | 10.38% | |
| Avg drawdowni | 14.97% | 8.29% | |
| Ulcer Indexi | 17.80% | 10.87% | |
| Max daily dropi | 8.97% | 5.34% | |
| Max wkly dropi | 22.71% | 11.71% | |
| 10Y | Growthi | +214.57% | +169.49% |
| CAGRi | +12.15% | +10.43% | |
| Volatilityi | 25.43% | 21.02% | |
| Sharpe ratioi | 0.40 | 0.36 | |
| Sortino ratioi | 0.57 | 0.51 | |
| Max drawdowni | 44.97% | 32.91% | |
| Current drawdowni | 19.33% | 10.38% | |
| Avg drawdowni | 9.55% | 8.66% | |
| Ulcer Indexi | 13.44% | 11.30% | |
| Max daily dropi | 13.42% | 11.58% | |
| Max wkly dropi | 24.36% | 21.00% |
| Category | NEE | AEP |
|---|---|---|
| Company | NextEra Energy, Inc. | American Electric Power Company, Inc. |
| Sector | Utilities | Utilities |
| Industry | Utilities - Regulated Electric | Utilities - Regulated Electric |
| Core business | Largest electric utility in the US by market capitalization, combining a regulated utility (Florida Power & Light) with the world's largest wind and solar generation business (NextEra Energy Resources). The dual platform model blends regulated earnings stability with competitive clean energy growth. | One of the largest electric utilities in the US, operating the nation's largest transmission network across 11 states. Serves 5.6 million customers through regulated utility subsidiaries with a focus on transmission and distribution infrastructure investment. |
| Investor focus | Renewable energy development pipeline at Energy Resources, FPL rate base growth and regulatory outcomes, contracted backlog visibility, energy storage deployments, and dividend growth trajectory. | Transmission investment and rate base growth, regulatory outcomes across 11 states, data center load growth in key service territories, dividend yield sustainability, and asset portfolio simplification. |
- World's largest generator of wind and solar energy with an unmatched development pipeline and operating scale
- Florida Power & Light provides a stable regulated earnings base in a constructive regulatory jurisdiction
- Dual platform model offers both utility predictability and renewable energy growth in a single stock
- Operates the largest electricity transmission network in the US — a critical infrastructure asset with long-lived, predictable returns
- Multi-state regulated platform with a large capital investment plan driving consistent rate base growth
- Higher dividend yield around 3.4% appeals to income-focused investors seeking utility sector exposure
- Rising interest rates increase the cost of capital for renewable energy project development and compress project returns
- Policy risk from potential changes to renewable energy tax credits including the IRA framework
- Premium valuation relative to utility peers requires sustained execution on both the regulated and competitive sides
- Multi-state regulatory complexity with 11 jurisdictions creates risk of unfavorable rate case outcomes
- Transmission investment returns depend on FERC regulatory policies and allowed return on equity formulas
- Asset portfolio simplification (divestitures of non-core businesses) creates near-term earnings transition risk
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