With a juicy yield of about 4.60% and a consistent record of paying a dividend, Duke Energy is worth some additional diligence.
“According to our Charter, one of Duke Energy’s benchmarks for success is to provide a superior return to investors,” said James E. Rogers, chairman, president and CEO. “We are committed to having a 70- to 75-percent payout ratio, and we expect to grow our dividends with earnings over time. The board’s action increases our dividend by nearly 5 percent and affirms we are fulfilling that commitment.”
This is the 81st consecutive year that Duke Energy has paid quarterly cash dividends on its common stock. However, we must look a little closer at this figure as we like to see a track record of growing dividends and Duke Energy has had a recent cut in its dividend. That doesn’t completely exclude it from the buy list, but it definitely doesn’t help.
As you can see Duke Energy has a higher dividend payout ratio (70-75%) than I typically like to see. Duke’s payout ratio is also greater than its peers such as Constellation Energy who typically hold their dividend payout ratio in the 20-30% range.
Also note that revenue has decreased over the past three years, while the cost of revenue has increased over the past year.
Duke Energy Corp., one of the largest electric power companies in the United States, supplies and delivers energy to approximately 3.9 million U.S. customers. The company has nearly 37,000 megawatts of electric generating capacity in the Midwest and the Carolinas, and natural gas distribution services in Ohio and Kentucky.
I think that I will continue my search in an attempt to find an energy stock that has increasing divdends, revenues and profits.
Disclosure: I do not own shares of Duke Energy.