It's been just over a year since I last wrote about Duke Energy Corporation (NYSE:DUK). You can find this article here. Duke's share price has gone up by 4.33% in the past 12 months, underperforming the S&P 500, which saw an increase of 19.60% in the same timeframe. In the past 12 months, the dividend yield has decreased slightly, from 4.55% to 4.44%, despite a 2% dividend increase. Looking at the long-term dividend yield graph, shows us that Duke's current dividend yield is historically low. Southern Company (NYSE:SO), which is used as comparison in my previous article, has seen its dividend yield rise to 4.84%.
DUK Dividend Yield data by YCharts
Both Southern and Duke tend to pay out a large part of their earnings in the form of dividends. However, Southern's dividend growth rate is a bit higher than Duke's, with a 5-year growth rate of 3.90%.
DUK Dividend Per Share (5-Year Growth) data by YCharts
Both companies have decent short term balance sheet health. Duke has a current ratio of 1.41 and a quick ratio of 0.58, while Southern has a current ratio of 1.06 with a quick ratio of 0.48. However, there is a large difference in long term debt, as can be seen from the next graph. It should be noted that Duke is a slightly larger company in terms of market cap and revenue, which would partly explain the higher level of debt. To put these numbers into perspective, Duke's long-term debt is equal to 1.59 times this year's expected revenue, while Southern's $23.30 billion in long-term debt is 1.30 times its expected revenue.
DUK Total Long Term Debt (Annual) data by YCharts
During most of the past 5 years, Southern has been more expensive than Duke when looking at the forward price to earnings ratios. However, Duke's price per share has been going up at a higher rate than its earnings, causing its P/E ratio to rise. At the time of writing, Duke and Southern are trading at 15.35 and 15.66 times expected earnings.
DUK PE Ratio (Forward) data by YCharts
Last year, I said Southern was a better choice than Duke for investors looking for high, sustainable yields. In my opinion, this is still true. Southern's dividend yield has become quite a bit higher than Duke's (4.84% vs. 4.44%). Furthermore, Southern's dividend grows at a higher pace, with a dividend growth rate of 3.90% over the past 5 years, compared to Duke's 2.74%. Lastly, Duke's long-term debt is a lot bigger than Southern's, which adds interest rate risk. With both companies trading at almost identical forward P/Es, I believe Southern is still a better choice than Duke.
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