Our analysis is based on comparing Duke Energy Corp. with the following peers – Xcel Energy Inc., Southern Company, SCANA Corporation, American Electric Power Company, Inc., Dominion Energy Inc, PPL Corporation, FirstEnergy Corp., PG&E Corporation, Ameren Corporation and NextEra Energy, Inc. (XEL-US, SO-US, SCG-US, AEP-US, D-US, PPL-US, FE-US, PCG-US, AEE-US and NEE-US).
Duke Energy Corp.’s dividend yield is 5.10 percent and its dividend payout is 108.13 percent. This compares to a peer median dividend yield of 3.60 percent and a payout level of 62.44 percent. This type of dividend performance might make it a good stock for dividend investors. However, the company’s relatively low dividend quality score of 25 out of a possible score of 100 raises questions on the sustainability of its robust payout ratio.
Dividend Quality Overview
- Over the last twelve months (prior to March 31, 2017), DUK-US paid a medium quality dividend, which represents a yield of 4.07% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 3 were medium quality and 2 were low quality.
- The ending cash balance is less than the last full year dividend payment and cannot be relied on to cushion any significant reduction of cash flows in the future.
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Over the last twelve months (prior to March 31, 2017), DUK-US paid a medium quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 2.72x), investing cash flow (coverage of -5.15x), issuance cash flow (coverage of 3.48x) and twelve-month prior cash (coverage of 0.33x), for a total dividend coverage of 1.37x.
These coverage ratio factors imply that the firm’s net cash inflow from issuance was required (in addition to operating and investment cash) to pay the dividend, which suggests a medium dividend quality.
|Dividend Yield (%)||3.9||4.49||3.78||4.59||4.29||5.1|
|Dividend Payout (%)||98.7||81.86||79.2||78.59||87.09||108.13|
A complete list of metrics and analysis is available on the company page.
Duke Energy Corp. engages in electric power and gas distribution operations, and provides other energy related services. It operates its business through the following segments: Regulated Utilities, International Energy, and Commercial Portfolio. The Regulated Utilities segment conducts electric and gas operations primarily through Duke Energy Carolinas, Duke Energy Progress, Duke Energy Florida, Duke Energy Indiana, and the regulated transmission and distribution operations of Duke Energy Ohio. The International Energy segment principally operates and manages power generation facilities and engages in the sales and marketing of electric power, natural gas, and natural gas liquids outside the U.S. The Commercial Posrtfolio segment owns, operates and manages power plants and engages in the wholesale marketing and procurement of electric power, fuel and emission allowances related to these plants as well as other contractual positions. The company was founded on April 3, 2006 and is headquartered in Charlotte, NC.
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