NextEra Energy vs. Duke Energy: Which Utility Stock Shines Brighter?

Industry Overview - The Zacks Utility - Electric Power industry is characterized by a regulated structure that supports stable, long-term income, allowing utilities to recover costs and earn consistent returns, which reduces earnings volatility [1] - The industry is evolving due to a shift toward clean energy, with significant investments in grid modernization, renewable integration, and electrification, reshaping the sector [2] Company Profiles NextEra Energy - NextEra Energy is a leading U.S. utility known for its investments in renewable energy, including wind, solar, and battery storage, driving the clean energy transition [3] - The company operates one of the largest portfolios of wind and solar projects globally and has strong financials and a history of innovation [3] - NextEra Energy's earnings per share (EPS) estimate for 2025 has increased by 0.27% over the past 60 days, with a long-term earnings growth projection of 7.72% [6] Duke Energy - Duke Energy is one of the largest U.S. utilities, aiming to cut carbon emissions by 50% by 2030 and achieve net-zero emissions by 2050, with plans to double renewable capacity by 2030 [4] - The company is investing in modern infrastructure and clean technologies, offering stable, regulated returns with long-term growth potential [4] - Duke Energy's EPS estimates for 2025 remained unchanged, while the 2026 estimates decreased by 0.15%, with a long-term earnings growth projection of 6.33% [8] Financial Metrics - NextEra Energy's current dividend yield is 3.33%, while Duke Energy's is 3.59%, both exceeding the industry average of 3.17% [11] - Return on Equity (ROE) for NextEra Energy is 12.06%, outperforming Duke Energy's ROE of 9.88% and the industry's ROE of 10.13% [12] - NextEra Energy's debt-to-capital ratio is 56.98%, compared to Duke Energy's 60.61%, with the industry's average at 54.57% [14] Valuation and Capital Expenditure - NextEra Energy is trading at a Price/Earnings Forward 12-month ratio of 17.93X, slightly cheaper than Duke Energy's 17.96X, while both are above the industry average of 15.37X [15] - NextEra Energy plans to invest nearly $72.6 billion from 2025 to 2029, while Duke Energy plans to invest $46.6 billion from 2025 to 2027, focusing on infrastructure and clean electricity generation [17] Conclusion - NextEra Energy has a marginal edge over Duke Energy due to its positive earnings estimate movement, better ROE, and cheaper valuation, despite both companies holding a Zacks Rank 3 (Hold) [18]