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IPO Report: NextEra Energy Partners, LP (NEP)

By  +Follow June 26, 2014 3:36AM
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NextEra Energy Partners IPO, IPO, IPO Report, NextEra Energy Partners IPO report, IPOs today, stocks to buy nowNextEra Energy Partners, LP ($NEP) is a wind/solar 'carve-out' from NextEra Energy (NEE) . NEE is an electric power company with a $43.6 billion market cap and is headquartered in Juno Beach, FL.

Fourteen other companies are scheduled for the week of June 23, 2014.  The complete IPO calendar is available at IPOpremium.

The manager and co-managers are BofA Merrill Lynch, Goldman Sachs, and Morgan Stanley.  The joint managers are Baird, Barclays, BMO Capital Markets, Credit Suisse, KeyBanc Capital Markets, RBC Capital Markets, UBS Investment Bank, and Wells Fargo Securities.

NEP scheduled a $325 million IPO on the NYSE with a market capitalization of $1.52 billion at a price range midpoint of $20 for Friday, June 27, 2014. SEC filings

The price range mid-point recently was raised to $24. The rating is the same.

NextEra Energy Partners IPO Report

Overview

NEP is a wind/solar 'carve-out' from NextEra Energy. NEE is an electric power company with a $43.6 billion market cap.

For the year ending June '15 NEP is projecting a 3.75% yield at the price range mid-point of $20. The parent's yield is 2.9%. 

The projected annual pay-out  growth is 12-15% over the next three years.

Valuation

Glossary

Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

projected June '15 yr

       

NextEra Energy Partners, LP (NEP)

$1,860

5.8

31.8

1.9

2.1

18%

             

Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

Yield

             

NextEra Energy Partners, LP (NEP)*

$1,860

5.8

31.8

1.9

2.1

3.75%

*Projected yield for June '15 yr

       

Parent/sponsor 2013 yr because seasonal

     

NextEra Energy (NEE)

$43,630

2.9

22.9

2.4

2.5

2.9%

Abengoa Yield plc (ABY)*

$2,980

5.0

55.2

1.6

-0.6

2.8%

*Projected yield for June '15 yr

       

NRG Yield (NYLD)*

$5,670

18.1

84.6

9.0

10.4

2.8%

Pattern Energy Group (PEGI)*

$2,500

12.4

147.1

5.3

3.3

4.2%

*current yield

         
             

Conclusion

NEP is an LP 'carve out' from a large company, NextEra Energy (NEE). NEE has a $43 billion market cap.

NEE plans to feed properties to NEP to produce a 12-15% increase in payout over the next three years.

The current projected payout for the 12 months ending June '15 is 3.75%

The rating on NEP is a buy.

Business

NEP is a growth-oriented limited partnership formed by NextEra Energy, Inc. to own, operate, and acquire contracted clean energy projects with stable, long-term cash flows through its limited partner interest in NEE Operating LP.

NEP will own a controlling, non-economic general partner interest and a 17.4% limited partner interest in NEE Operating LP.

Parent/sponsor

NEE owns and operates approximately 17% of the installed base of United States wind power production capacity and operates approximately 14% of the installed base of United States utility-scale solar power production capacity as of December 31, 2012

NEE has over 42,000 megawatt of generating capacity in 26 states in the United States and four provinces in Canada.

NEE also purchases electric power for resale to its customers and provides risk management services related to power and gas consumption for a limited number of customers.

NEP acquisitions from NEE

Upon the completion of this offering, NEP will own interests in ten wind and solar projects, nine of which will be operational and one of which is expected to be in the final stages of construction.

NEP intends to take advantage of favorable trends in the North American energy industry, including the ongoing trend of clean energy projects replacing aging or uneconomic projects, demand by utilities for renewable energy to meet state RPS requirements and the improving competitiveness of clean energy relative to other fuels.

NEP plans to focus on high-quality, long-lived projects operating under long-term contracts with creditworthy counterparties that are expected to produce stable long-term cash flows.

NEP believes its cash flow profile, geographic and technological diversity, cost-efficient business model, and relationship with NextEra will provide NEP with a significant competitive advantage and enable it to execute its growth strategy.

NEP’s objective is to pay stable and growing cash distributions to the holders of its common units. NEE Operating LP’s partnership agreement will provide that NEE Operating LP will distribute all cash available for distribution to its unitholders on a quarterly basis and NEP intends to use the amount distributed to it to pay regular quarterly distributions to holders of its common units.

Dividend Policy

$0.75 per common unit on an annualized basis, which is 3.75% yield.

NEP intends to target a three-year annual growth rate in its cash available for distribution of 12% to 15% per common unit.

This target is based on NextEra’s stated intention that it plans to offer NEP sufficient NEER ROFO Projects each year to produce such an increase.

NEP believes that the acquisition opportunities associated with NEE Operating LP’s right of first offer for the NEER ROFO Projects, other NEER projects, as well as other acquisition opportunities in North America, all of which have many of the characteristics of the projects in its Initial Portfolio, will give NEP the opportunity to grow its cash available for distribution over time.

While NEP believes its targeted growth rate is reasonable, it is based on estimates and assumptions regarding a number of factors, many of which are beyond its control, and NEP may not be able to grow its business at a rate consistent with its expectations, if at all.

Competition

NEP competes on the basis of contract price and terms, as well as the location of its projects in an industry.

There is a wide variation in terms of the capabilities, resources, scale and scope of the companies with which NEP competes, depending on the market. NEP believes it has numerous competitors with a varied mix of characteristics.

In addition, competitive conditions may be substantially affected by various forms of energy legislation and regulation considered from time to time by federal, state, provincial and local legislatures and administrative agencies.

Such laws and regulations may substantially increase the costs of acquiring, constructing and operating projects, and some of NEP’s competitors may be better able to adapt to and operate under such laws and regulations.

5% stockholders

NextEra 82.6%

Use of proceeds

NEP expects to net $305 million from its IPO. Proceeds are allocated as follows:

$150 million of the net proceeds from this offering to purchase 7,994,883 NEE Operating LP common units from NEE Operating LP. NEE Operating LP will use such net proceeds for general corporate purposes, including to fund future acquisition opportunities.

$154.9 million of the net proceeds of this offering to purchase 8,255,117 NEE Operating LP common units (or 10,692,617 NEE Operating LP common units if the underwriters exercise in full their option to purchase additional common units) from NEE Equity.

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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Results for NEP
Analyst Actions
1 Sep 15 11:55:01
$NEP: Analyst action by Baird on NextEra Energy Partners: http://t.co/RuHjArRI8o http://t.co/OajVaVrVEm
BNK Invest
1 Sep 15 10:43:00
Top Buys by Directors: Pimentel Jr.'s $149.9K Bet on $NEP $YLCO #energy http://t.co/lxVpJwvQ6Q
US Banking News
1 Sep 15 10:32:26
Nextera Energy Partners Price Target Cut to $34.00 $NEP http://t.co/7VI1dRE7Ky
FirstToMarkets
1 Sep 15 10:30:07
NextEra Energy Partners, LP Lower Price Target by Deutsche Bank (Ranked 13th) to Hold with 34 PT $NEP #NEP http://t.co/A7zjRG1YpR
Ticker Report
1 Sep 15 10:25:37
Nextera Energy Partners Price Target Cut to $34.00 $NEP http://t.co/eTfxJMajP1
Dakota Financial
1 Sep 15 10:25:10
Nextera Energy Partners Price Target Cut to $34.00 $NEP http://t.co/euZFuaqnWn
US Consumer News
1 Sep 15 10:19:07
Nextera Energy Partners LP's PT cut by Deutsche Bank to $34.00. hold rating. http://t.co/NOtZlWaYga $NEP #NEP
MarketBeatCom
1 Sep 15 10:19:02
Nextera Energy Partners LP's PT cut by Deutsche Bank to $34.00. hold rating. http://t.co/ebqCWtTfKz $NEP #NEP
Consumer News
1 Sep 15 10:16:38
Deutsche Bank Lowers Nextera Energy Partners Price Target to $34.00 $NEP http://t.co/dbVkKZzaEL #acn
ProTradersNews
1 Sep 15 09:02:03
$GS $NRG $NEP $PEGI $NYLD.A: US clean energy suffers from lack of wind: http://t.co/LXxNcTWUx8
The Legacy News
1 Sep 15 07:44:03
Nextera Energy Partners insider Armando Pimentel, Jr. Buys 5,000 Shares $NEP http://t.co/oYQXtgNOTc
Sleek Money
1 Sep 15 07:37:38
Nextera Energy Partners insider Armando Pimentel, Jr. Buys 5,000 Shares $NEP http://t.co/6GZA536h9v
US Banking News
1 Sep 15 05:25:04
Insider Buying: Nextera Energy Partners insider Buys 5,000 Shares of Stock $NEP http://t.co/rdIai9mnH2
Amy Poszywak
1 Sep 15 05:24:40
Equity markets prompt NextEra to alter financing plan for #yieldco acquisitions, @TestaTime reports | http://t.co/2VY3Kh5kBh $NEE $NEP
Ticker Report
1 Sep 15 05:12:41
Insider Buying: Nextera Energy Partners insider Buys 5,000 Shares of Stock $NEP http://t.co/UVgtHASpOH
Sleek Money
1 Sep 15 04:38:21
Nextera Energy Partners Upgraded to Overweight at KeyBanc $NEP http://t.co/RswFVoVKzc
Stock Trade Alerts
1 Sep 15 04:09:33
$NEE, $NEP, $HE, $NEE NextEra Energy, Hawaiian Electric Provide Additional Details on Merger… http://t.co/AkNoodLepq ~ via @AlertTrade
BenzingaWire
1 Sep 15 04:06:05
$NEE, $NEP, $HE, $NEE NextEra Energy, Hawaiian Electric Provide Additional Details on Merger Plans - http://t.co/k7plTUuACG
BeatTheStreet
1 Sep 15 01:49:43
$NEP Pimentel Armando Jr bought 5k shares http://t.co/mb9bWSZpXD
Breaking News
31 Aug 15 15:01:04
$NEP: Nextera Energy Partners, Lp (NEP) Files Form 4 Insider Buying …: http://t.co/09DA6u30fj
Analyst Actions
31 Aug 15 14:28:01
$NEP: Analyst action by Baird on NextEra Energy Partners: http://t.co/RuHjArRI8o http://t.co/iuiMYRXzFj
Consumer News
31 Aug 15 14:20:36
Nextera Energy Partners Price Target Lowered to $47.00 at Mizuho $NEP http://t.co/ZWAyLyFDUH #acn
Consumer News
31 Aug 15 13:37:38
KeyBanc Upgrades Nextera Energy Partners to “Overweight” $NEP http://t.co/NrjkuT8602 #acn
US Banking News
31 Aug 15 13:34:22
Nextera Energy Partners Upgraded at KeyBanc $NEP http://t.co/RmACs1ztBd
US Stock Ratings
31 Aug 15 13:32:14
KeyBanc Capital Mkts upgrades $NEP from Sector Weight to Overweight, target price to $38.0 http://t.co/iNl5LZNMn7
Ticker Report
31 Aug 15 13:27:10
Nextera Energy Partners Upgraded at KeyBanc $NEP http://t.co/INn6UpzmM4
Dakota Financial
31 Aug 15 13:24:17
Nextera Energy Partners Upgraded at KeyBanc $NEP http://t.co/vfcNdklmHC
MarketBeatCom
31 Aug 15 13:15:38
Nextera Energy Partners LP upgraded by KeyBanc to overweight. http://t.co/tLblh0EL17 $NEP #NEP
FirstToMarkets
31 Aug 15 13:15:06
NextEra Energy Partners, LP Upgrade by KeyBanc Capital Markets (Ranked 54th) to Overweight $NEP #NEP http://t.co/yLugzQa77p
US Consumer News
31 Aug 15 13:14:39
Nextera Energy Partners LP upgraded by KeyBanc to overweight. http://t.co/5LnjRQISKH $NEP #NEP
smart-ticker.com
31 Aug 15 12:52:37
Market close top stocks bear trade ideas: $RGS $ARIA $SCO $NEP $NBL $ALNY $NEE $DO $ERY $RUSS
Analyst Actions
31 Aug 15 12:29:02
$NEP: Analyst action by Baird on NextEra Energy Partners: http://t.co/LRuzqb2mAS http://t.co/Zp554pbt5F
Abbie Grandstaff
31 Aug 15 10:49:07
RT @AnalystWire: NextEra Energy Partners $NEP Seen as Best-in-Class YieldCo, Upgraded at KeyBanc http://t.co/RnVVtt8919
SIAnalystWire
31 Aug 15 10:39:23
NextEra Energy Partners $NEP Seen as Best-in-Class YieldCo, Upgraded at KeyBanc http://t.co/RnVVtt8919
StockNewsWires
31 Aug 15 09:17:02
$NEP $MCEP $VSAR: 3 Highly Unusual Volume Spikes: Nextera Energy Partners LP …: http://t.co/oTs8x2xKYA
BNK Invest
31 Aug 15 09:11:07
$VPU $NEP $UTL $CTWS Large Outflows Detected at ETF #etfs http://t.co/oTIzGXFHhR
ETFChannel
31 Aug 15 09:11:03
$VPU $NEP $UTL $CTWS Large Outflows Detected at ETF #etfs: Symbols mentioned in this story: VPU, NEP, UTL... http://t.co/784bOUm0Fr
Quantcha
31 Aug 15 08:22:40
Big Loser Alert: Trading today’s -7.6% move in NEXTERA ENERGY PARTNERS LP $NEP http://t.co/ZkayfexbZ4
smart-ticker.com
31 Aug 15 07:35:08
Top stocks bear trade ideas: $ARIA $RGS $ALNY $NEP $NBL $BNS $VNR $ERX $STR $CNQ more http://t.co/afLVqGEPgY
stockschamp
31 Aug 15 06:55:23
Gains Over 2500% In one Trade.. Subscribe Here! http://t.co/8WvnrVmkBS .. $NEP $NES $NEU
AlphaStreet
31 Aug 15 04:30:08
$NEE $NEP schedules its investor conference call &webcast to discuss financial plans on August 31, 2015 at 9AM Eastern Time
TimeForGrowth
30 Aug 15 03:59:02
$NEP: Wall Street analysts bullish on NEP's earnings growth: http://t.co/12Bnivxerf http://t.co/m3HqlCtLMN
dailystockplays.com
28 Aug 15 16:05:55
Wide Range Bar http://t.co/uMqVCxT4sI $ARIA $RGSE $SPLK $LINE $USO $BTU $CRC $STXS $MPO $EOX $CAL $MDP $VEEV $SPWH $NEP $OVTI $VHI $BNO
smart-ticker.com
28 Aug 15 12:25:57
Market close top stocks bull trade ideas: $ATVI $ARIA $BIG $FCX $MDP $DJP $NEP $TFM $USO $OVTI
Quantcha
28 Aug 15 08:28:00
Big Gainer Alert: Trading today’s 9.2% move in NEXTERA ENERGY PARTNERS LP $NEP http://t.co/3UTtLyFJyd
NewsHedge Squawk
28 Aug 15 08:07:15
$NEP small pop, trading at the highs on good volume. http://t.co/4akT3wVOlj
Breaking News
28 Aug 15 03:45:04
$NEP: NextEra Energy Partners, LP (NYSE:NEP) Price Target Update: http://t.co/UeX91uPOZa
InvestWithConf
27 Aug 15 23:33:02
$NEP is rated BUY, 44.9% upside by Wall Street analysts based on average ratings/targets http://t.co/VcL30vfzvk http://t.co/pEZch9ZOoI
Sleek Money
27 Aug 15 12:51:47
Nextera Energy Partners Now Covered by Robert W. Baird $NEP http://t.co/loH4eZsRb7
Analyst Actions
26 Aug 15 14:45:02
$NEP: Analyst action by Baird on NextEra Energy Partners: http://t.co/LRuzqb2mAS http://t.co/T4y4G1DEzo
				
				
By  +Follow June 26, 2014 3:36AM
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