Duke Energy returned losses of -19.7% last year, with its stock price reaching a high of $113.67 and a low of $83.76. Over the same period, the stock underperformed the S&P 500 index by -22.0%. As of April 2023, the company's 50-day average price was $95.8. Duke Energy Corporation, together with its subsidiaries, operates as an energy company in the United States. Based in Charlotte, NC, the large-cap Utilities company has 27,859 full time employees. Duke Energy has offered a 4.4% dividend yield over the last 12 months.
Exceptional Profitability Overshadowed by Excessive Leverage:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $25,079 | $23,868 | $25,097 | $28,768 |
| Gross Margins | 46.1% | 48.5% | 48.2% | 45.1% |
| Operating Margins | 22.8% | 23.2% | 22.8% | 22.3% |
| Net Margins | 14.94% | 5.77% | 15.57% | 9.28% |
| Net Income (MM) | $3,748 | $1,377 | $3,908 | $2,669 |
| Net Interest Income | -$2,204,000 | -$2,162,000 | -$2,280,000 | -$2,439,000 |
| Depreciation & Amort. | -$4,548,000 | -$4,705,000 | -$4,990,000 | -$5,086,000 |
| Earnings Per Share | $5.06 | $1.72 | $4.94 | $4.88 |
| EPS Growth | n/a | -66.01% | 187.21% | -1.21% |
| Diluted Shares (MM) | 729 | 738 | 769 | 771 |
| Free Cash Flow (MM) | $8,209 | $8,856 | $8,290 | $5,927 |
| Capital Expenditures (MM) | -$11,122 | -$9,907 | -$9,715 | -$11,367 |
| Net Current Assets (MM) | -$101,724 | -$104,522 | -$108,511 | -$113,053 |
| Current Ratio | 0.62 | 0.53 | 0.62 | 0.7 |
| Long Term Debt (MM) | $54,985 | $55,625 | $60,448 | $67,061 |
| Net Debt / EBITDA | 5.53 | 7.8 | 5.87 | 7.1 |
Duke Energy has growing revenues and a flat capital expenditure trend and strong margins with a stable trend. Additionally, the company's financial statements display a steady stream of strong cash flows and wider gross margins than its peer group. However, the firm has a highly leveraged balance sheet. Finally, we note that Duke Energy has flat EPS growth.
Duke Energy's Valuation Is in Line With Its Sector Averages:
Duke Energy has a trailing twelve month P/E ratio of 19.6, compared to an average of 22.89 for the Utilities sector. Based on its EPS guidance of $5.99, the company has a forward P/E ratio of 16.0. The 3.4% compound average growth rate of Duke Energy's historical and projected earnings per share yields a PEG ratio of 5.72. This suggests that these shares are overvalued. Furthermore, Duke Energy is likely overvalued compared to the book value of its equity, since its P/B ratio of 1.47 is higher than the sector average of 1.03. The company's shares are currently trading 19.2% above their Graham number.
There's an Analyst Consensus of Some Upside Potential for Duke Energy:
The 13 analysts following Duke Energy have set target prices ranging from $102.0 to $120.0 per share, for an average of $109.08 with a buy rating. As of April 2023, the company is trading -12.2% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Duke Energy has a very low short interest because 1.0% of the company's shares are sold short. Institutions own 65.4% of the company's shares, and the insider ownership rate stands at 0.12%, suggesting a small amount of insider investors. The largest shareholder is the Vanguard Group, Inc., whose 9% stake in the company is worth $6,334,634,506.
