Two negatives make NextEra a sell

Article Excerpt

NEXTERA ENERGY INC. $51 (New York symbol NEE; Income Portfolio, Utilities sector; Shares outstanding: 418.4 million; Market cap: $21.3 billion; Price-to-sales ratio: 1.3; Dividend yield: 3.9%; TSINetwork Rating: Average; www.nexteraenergy.com) is paying First Solar Inc. (Nasdaq symbol FSLR) an undisclosed sum for four solar-power projects in Ontario. These projects should begin producing electricity in the first quarter of 2011. Solar and wind-power projects are heavily reliant on government subsidies. Governments will likely cut these subsidies as they look for ways to deal with their ballooning budget deficits. Moreover, NextEra gets 70% of its revenue from Florida Power and Light Co., a regulated utility with 4.5 million customers in Florida. This high reliance on a slow-growing state, plus the potential for major hurricane damage, limits NextEra’s appeal. NextEra Energy is a sell. sell…