DUK

Quick Update for DUK Investors

Today we're going to take a closer look at large-cap Industrials company Duke Energy, whose shares are currently trading at $98.31. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!

A Lower P/B Ratio Than Its Sector Average but Trades Above Its Graham Number:

Duke Energy Corporation, together with its subsidiaries, operates as an energy company in the United States. The company belongs to the Industrials sector, which has an average price to earnings (P/E) ratio of 22.19 and an average price to book (P/B) ratio of 4.06. In contrast, Duke Energy has a trailing 12 month P/E ratio of 20.8 and a P/B ratio of 1.61.

Duke Energy's PEG ratio is 2.75, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.

Growing Revenues With Increasing Reinvestment in the Business:

2018 2019 2020 2021 2022 2023
Revenue (MM) $24,521 $25,079 $23,366 $24,621 $28,768 $29,199
Revenue Growth n/a 2.28% -6.83% 5.37% 16.84% 1.5%
Operating Margins 19% 23% 20% 22% 21% 22%
Net Margins 11% 15% 6% 16% 13% 13%
Net Income (MM) $2,666 $3,748 $1,377 $3,908 $3,778 $3,829
Net Interest Expense (MM) $2,094 $2,204 $2,097 $2,207 $2,439 $2,900
Depreciation & Amort. (MM) $4,696 $5,176 $5,486 $5,663 $5,843 $5,967
Diluted Shares (MM) 708 729 738 769 770 772
Free Cash Flow (MM) -$2,203 -$2,913 -$1,051 -$1,425 -$5,440 -$4,481
Capital Expenditures (MM) $9,389 $11,122 $9,907 $9,715 $11,367 $12,529
Current Ratio 0.65 0.62 0.53 0.62 0.7 0.76
Total Debt (MM) $57,939 $61,261 $62,736 $67,139 $73,703 $78,541
Net Debt / EBITDA 5.42 4.84 5.27 5.01 5.39 5.52

Duke Energy has weak operating margins with a stable trend, declining EPS growth, and a highly leveraged balance sheet. On the other hand, the company has growing revenues and increasing reinvestment in the business working in its favor.

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.

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