Duke Energy: I Am Buying The Recent Dip

Zoltan Ban8.4K FollowersFollow5ShareSavePlay(10min)CommentsSummaryDuke Energy offers a defensive profile with stable returns, a 3.66% dividend yield, and measured growth potential.DUK's revenue and net income rose 5% and 14% year-over-year, respectively, while elevated debt servicing costs were at 11% of revenue, which makes it prone to interest rate risks.Compared to peers like NextEra with a P/E ratio of 22, DUK trades at a lower forward P/E of 18.5 and delivers stronger total returns, underpinned by fundamentals.DUK benefits from operating in high-growth Southeastern states, positioning it for steady demand growth alongside demographic and business expansion. imaginima/iStock via Getty Images Investment Thesis Within the context of an increasingly unpredictable market, I am looking to gradually increase my position in defensive stocks with a decent dividend. My strategy is to look for relatively safe investments. I intend to furtherThis article was written byZoltan Ban8.4K FollowersFollowMy name is Zoltan Ban, I have a BA in economics. I am a personal investor with two decades of active trading experience.Analyst’s Disclosure:I/we have a beneficial long position in the shares of DUK either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Quick InsightsHow does Duke Energy's valuation and yield compare to NextEra?DUK trades at a lower forward P/E of 18.5 versus NextEra's nearly 22 and offers a more generous dividend yield, supporting superior total returns.What key financial risk does DUK face, and how material is it?DUK's debt servicing costs reached 11% of revenues in the first nine months, well above a 5% caution threshold, potentially constraining capital investment flexibility.What external growth drivers support DUK's outlook?DUK operates in some of the fastest-growing U.S. states, benefiting from robust demographic and business expansion that should drive sustained demand for its utility services.Recommended For You