The Company in a Nutshell
- Duke is one of the largest U.S. utilities with operations in the Midwest, Florida, and the Carolinas. Duke offers an attractive yield for income seekers, while not making unsustainable promises. Duke has successfully increased its payouts for 17 consecutive years.
| Date Reviewed | 05/14/2025 |
| Company Name | Duke Energy Corp |
| Symbol | DUK |
| Sector | Utilities |
| Industry | Utilities - Regulated Electric |
| Beta | 0.38 |
| PRO Rating | 4 |
| Dividend Safety | 3 |
Business Model
Duke Energy Corporation is an energy holding company. The Company operates through two segments: Electric Utilities and Infrastructure (EU&I) and Gas Utilities and Infrastructure (GU&I). The EU&I segment conducts operations primarily through the regulated public utilities of Duke Energy Carolinas, Duke Energy Progress, Duke Energy Florida, Duke Energy Indiana and Duke Energy Ohio. EU&I provides retail electric service through the generation, transmission, distribution, and sale of electricity to customers within the Southeast and Midwest regions of the United States. The GU&I segment conducts natural gas operations primarily through the regulated public utilities of Piedmont, Duke Energy Ohio, and Duke Energy Kentucky. GU&I serves residential, commercial, industrial, and power generation natural gas customers, including customers served by municipalities who are wholesale customers. It also purchases a diverse portfolio of transportation and storage services from interstate pipelines.
| Current price | 125.33 |
| ROE | 9.10 % |
| ROIC | 4.30 % |
| Shareholder Yield | 0.80 % |
| 5-Yr Total Return | 77.60 % |
| 1-Yr Total Return | 16.20 % |
| Next Earnings Date | 11-05-25 |
Latest Quarter Information
What the CEO said:
I am incredibly proud of our performance in the first quarter, which is a result of the constructive regulatory outcomes the team has delivered over the last several years. The fundamentals of the company are stronger than ever, positioning us extraordinarily well to meet our customers' growing and evolving energy demands – now and into the future.
What we say:
2025-05-13, DUK delivered a good Q1 for 2025, with operating revenues of $8.25B, driven by revenue growth across Electric and Gas utilities. The AEPS came in at $1.76, +22% YoY, driven by higher retail sales volumes and implementation of new rates and riders, as well as improved weather. Q1 segment income- Electric Utilities and Infrastructure: $1,276M, and Gas Utilities and Infrastructure: $349M. DUK reaffirmed its FY25 AEPS guidance of $6.17-$6.42, and long-term AEPS growth rate of 5%-7% through 2029. Duke Energy's consolidated reported effective tax rate for the first quarter of 2025 was 12.1%.
Investment Thesis
An investment in a utility stock is usually made on the typical assumption of buying a sustainable source of income. You get a stable business, relatively high yield, and clockwork increases. This is exactly the case with DUK. The company has a strong business model and a focus on stable revenue sources. In February of 2024, DUK increased its five-year capital expenditure plan by $8B from previous guidance to $73B, saying rising power consumption in the U.S. Southeast and Midwest states requires more investments in clean energy. Duke works with regulators to increase their rates gradually. Since the company has several projects (read large CAPEX), DUK should be able to continue these rate-increase strategies for several more years. Duke Energy is advancing its strategy to transition to a cleaner energy future. The company announced new initiatives aimed at expanding its renewable energy portfolio, including additional solar and wind projects, and investments in battery storage technology. Moreover, Duke Energy reached agreements with major tech companies like Amazon, Google, and Microsoft for clean energy supply, reinforcing its commitment to sustainability and long-term growth. We have a favorable view of DUK’s utility business in the Southeast region, with strong customer growth and regulatory support for renewable energy investments. DUK is a perfect match for any retirement or conservative portfolio looking for a stable dividend grower. 2025 adjusted EPS is expected to be $6.17-$6.42, and the long-term adjusted EPS growth rate is projected at 5% to 7% through 2029.
Dividend Triangle
| 5-Yr Rev. Growth | 3.90 % |
| 5-Yr EPS Growth | 2.45 % |
| 5-Yr Div Growth | 2.05 % |
Potential Risks
Duke boasts an impressive $73B budget for Capital Expenditures through 2028. It focuses on grid modernization, transitioning to a cleaner generation profile, natural gas infrastructure investments, and environmental remediation. While this is all good, some serious money must be either borrowed or new shares issued to finance those expenditures. DUK is counting on increasing their regulated rates and enjoying more profitability. A good example of this is the failure of the Atlantic Coast Pipeline (ACP). This was an $8B joint project with Dominion that was terminated. This will also reduce Duke’s earnings growth for the next few years. With current inflationary pressures, we are concerned about rate case outcomes if the economy continues to slow down. Not to mention that interest rates are starting to weigh more heavily on Duke’s budget.
| Debt/Equity | 1.70 |
| Financial Debt to EBITDA (TTM) | 5.70 |
| Current Ratio (Quarterly) | 0.65 |
| Credit Score | 58 |
Dividend Growth Perspective
Duke is an example of stability with consecutive dividend increases since 2007. When you look at both the payout and the cash payout ratios, you can understand why the company can’t afford to increase its dividend in a more substantial manner. However, the company is well-positioned to continue paying its dividend and offer a modest increase each year. In 2023, the company increased its dividend by 2%, from $1.005 to $1.025/share. The utility offered a similar increase in 2024, bringing the dividend to $1.045/share.
| Dividend ($) | 4.26 |
| Dividend Yield Fwd | 3.40 % |
| Dividend Frequency | Quarterly |
| Average 5-Yr Yield | 3.95 % |
| Payout Ratio (%) | 72.95 |
| Cash Payout Ratio (%) | -574.25 |
| DGR 1-Yr | 1.95 |
| DGR 3-Yr | 2.00 |
| DGR 5-Yr | 2.05 |
| DGR Streak | 19 |
| Chowder Score | 5.40 |
| Next DVD PMT | 09-16-25 |
Valuation
| Recent Annual Dividend Payment | $ 4.20 |
| Expected Dividend Growth Rate Years 1-10 | 3.00% |
| Expected Terminal Dividend Growth Rate | 4.00% |
| Discount Rate | 9.00% |
| Discount Rate (Horizontal) | |||
| Margin of Safety | 8.00% | 9.00% | 10.00% |
| 20% Premium | $ 120.77 | $ 96.92 | $ 81.00 |
| 10% Premium | $ 110.70 | $ 88.84 | $ 74.25 |
| Intrinsic Value | $ 100.64 | $ 80.76 | $ 67.50 |
| 10% Discount | $ 90.57 | $ 72.69 | $ 60.75 |
| 20% Discount | $ 80.51 | $ 64.61 | $ 54.00 |
Video Tutorial: How to Read the Stock Cards DDM Valuation
| Market Cap | 98 B |
| PE Ratio | 20.60 |
| Fwd PE | 19.25 |
| Price to Book Ratio | 1.95 |
| DDM Valuation | 80.76 |
| Average 5-Yr PE | 24.96 |
| Value Score | 59 |