DUK Stock Underperforms Industry in 6 Months: Here's How to Play

Core Viewpoint - Duke Energy (DUK) is experiencing growth in its renewable business and strategic investment plans, although its stock performance has lagged behind the industry average [1][20]. Group 1: Stock Performance - DUK shares have increased by 5.7% over the past six months, while the Zacks Utility-Electric Power industry has grown by 11.9% [1]. - Other industry players, NextEra Energy (NEE) and The Southern Company (SO), have seen stock gains of 23% and 1.3%, respectively, during the same period [2]. Group 2: Factors Driving Performance - Duke Energy is enhancing its energy mix through investments in modern technology and infrastructure, combining renewable resources with conventional sources [4]. - The company plans to reduce coal generation to under 5% by 2030 and eliminate it entirely by 2035, retiring 58 coal units totaling 8,000 megawatts (MW) [5]. - Duke Energy aims for net-zero methane emissions by 2030 and net-zero carbon emissions by 2050, with plans to add over 7,500 MW of new, lower-emission natural gas generation by 2030 [5]. Group 3: Investment Plans - The company plans to invest $190-$200 billion over the next decade to modernize infrastructure and enhance its renewable energy portfolio [8][9]. - Duke Energy is expanding its nuclear capabilities, partnering with GE Hitachi to advance small modular reactor technology as part of its clean energy strategy [10][20]. Group 4: Earnings Estimates and Performance - The Zacks Consensus Estimate for DUK's earnings per share (EPS) indicates a year-over-year increase of 7.29% for 2025 and 6.07% for 2026 [11]. - Duke Energy has consistently beaten earnings estimates over the past four quarters, with an average surprise of 5.72% [13]. Group 5: Dividend and Financial Metrics - Duke Energy's annual dividend is currently $4.26 per share, with a targeted payout ratio of 60-70% [15]. - The company's trailing 12-month return on equity (ROE) is 9.98%, higher than the industry average of 9.64% [17]. - DUK is trading at a forward 12-month P/E ratio of 18.55, which is a premium compared to the industry's 15.76 [18].