Duke Energy (DUK) Analysis
In this blog, I have been analyzing companies that I was looking to invest in. I have been writing up about the company as I have read their balance sheets. It is my opinion and doesnt represent any one elses opinion or the fit of the stock for investment purposes.
Duke Energy (DUK) is an electric utility. It has a market cap of 26.5 billion dollars. Duke energy primarily operates in the Carolinas. It also has a natural gas transmission division that supplies transportation and storage of natural gas along the U.S. East Coast, the Southeast, and in Canada. It also provides natural gas sales and distribution service to retail customers in Ontario, and natural gas processing services to customers in Western Canada.
In addition to this, the company has a P/E of 17 and a dividend yield of 4.4%. The dividend yield is pretty attractive so we will dive deeper into the balance sheets to see if DUK is a buy right now.
The company's dividends haven't increased significantly since 2002. It has increased from 1.10 to 1.17 in the past four years. The stock declined from a high of 48 to a low of about 13 in 2003. The dividend yield consequently increased because of the stock decline. Also, the revenues aren't growing at a pace that is commensurate with the P/E. Let us take a look at the balance sheets to see how things look.
The company has lagged behind the rest of the electric utilities for the past few years. The revenue for the company has declined this year compared to the past two years. Also the utility has had declining earnings compared to the rest of the companies in the electric utilities sector. Altough the dividend yield is attractive, the price to earnings growth and P/E are a bit high for this stock given its growth prospects.