What Are the Fundamentals Of DUK?

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.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.