Stock of the Day

December 19, 2019

Duke Energy (DUK)

$115.58
+$2.42 (+2.1%)
Market Cap: $87.41B

About Duke Energy

Duke Energy Corporation, together with its subsidiaries, operates as an energy company in the United States. It operates through two segments: Electric Utilities and Infrastructure (EU&I), and Gas Utilities and Infrastructure (GU&I). The EU&I segment generates, transmits, distributes, and sells electricity in the Carolinas, Florida, and the Midwest. It generates electricity through coal, hydroelectric, natural gas, oil, solar and wind sources, renewables, and nuclear fuel. This segment also engages in the wholesale of electricity to municipalities, electric cooperative utilities, and load-serving entities. The GU&I segment distributes natural gas to residential, commercial, industrial, and power generation natural gas customers; and invests in pipeline transmission projects, renewable natural gas projects, and natural gas storage facilities. The company was formerly known as Duke Energy Holding Corp. and changed its name to Duke Energy Corporation in April 2006. Duke Energy Corporation was founded in 1904 and is headquartered in Charlotte, North Carolina.

Duke Energy Bull Case

Here are some ways that investors could benefit from investing in Duke Energy Co.:

  • Duke Energy Co. has a strong market capitalization of $86.27 billion, indicating a solid position in the energy sector, which can provide stability and growth potential for investors.
  • The company recently reported earnings per share of $1.66, surpassing expectations, which reflects its ability to generate profit and may lead to increased investor confidence.
  • With a current stock price of $111.69, Duke Energy Co. is trading within a range that is significantly below its 12-month high of $121.25, suggesting potential for price appreciation.
  • The firm has a dividend yield of 3.74%, which is attractive for income-focused investors, providing a steady income stream through dividends.
  • Analysts have a consensus rating of "Moderate Buy" with an average target price of $122.08, indicating positive sentiment and potential for future growth in stock value.

Duke Energy Bear Case

Investors should be bearish about investing in Duke Energy Co. for these reasons:

  • The company has a debt-to-equity ratio of 1.55, which indicates a higher level of debt compared to equity. This could pose risks in terms of financial stability and flexibility.
  • With a quick ratio of 0.45 and a current ratio of 0.70, Duke Energy Co. may face challenges in meeting short-term liabilities, which could affect its liquidity position.
  • Recent downgrades from analysts, such as KeyCorp lowering its rating from "overweight" to "sector weight," may signal concerns about the company's future performance.
  • The stock has a relatively high PEG ratio of 2.83, suggesting that it may be overvalued compared to its earnings growth rate, which could deter value investors.
  • Market volatility, as indicated by a beta of 0.50, suggests that while the stock is less volatile than the market, any significant market downturn could still impact its performance negatively.

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