PPL vs. DUK: Which Utility Stock Makes a Stronger Investment Case?

Industry Overview - The Zacks Utility Electric - Power industry is experiencing a transformation due to rising electricity demand from data center expansion, transportation electrification, and grid modernization initiatives [1] - Utilities are heavily investing in infrastructure to improve grid resilience, enhance transmission and distribution lines, integrate renewable energy, and comply with regulations [1] Company Investments - PPL Corporation plans to invest $20 billion from 2025 to 2028 to strengthen its infrastructure, focusing on grid hardening and accommodating increased electrification [2] - Duke Energy Corporation expects to spend $83 billion during the 2025-2029 period for grid modernization and transitioning to low-carbon energy sources [3] Earnings Growth Prospects - The Zacks Consensus Estimate for PPL's earnings shows year-over-year growth of 7.69% for 2025 and 8.24% for 2026, with a long-term growth rate of 7.46% [5] - Duke Energy's earnings are projected to grow by 7.12% in 2025 and 6.24% in 2026, with a long-term growth rate of 6.33% [8] Return on Equity - PPL's current Return on Equity (ROE) is 8.88%, while Duke Energy's ROE is 9.50%, both slightly below the industry average of 9.77% [11] Capital Expenditure Plans - PPL's capital investment plan focuses on infrastructure projects for generation, transmission, and distribution, with a regulated capital investment of $20 billion from 2025 to 2028 [14] - Duke Energy aims to enhance its operations and renewable generation portfolio with an expected expenditure of $83 billion from 2025 to 2029 [15] Valuation Metrics - PPL is trading at a forward earnings multiple of 19.54X, above its five-year median of 16.72X, while Duke Energy's forward earnings multiple is 18.7X, also above its median of 17.64X [16] Dividend Yield - PPL's current dividend yield is 2.99%, and Duke Energy's is 3.46%, both exceeding the S&P 500 Composite average of 1.65% [18] Price Performance - Over the past year, PPL shares have increased by 32.4%, while Duke Energy's shares have risen by 23.1%, both outperforming the industry's growth of 16.8% [19] Conclusion - Both PPL and Duke Energy are making substantial investments to modernize their infrastructure and meet rising electricity demand, presenting significant growth opportunities for investors [22]