ZACKS·2025-12-19 13:41Industry Overview - Utility service providers are benefiting from increased electricity tariffs, accretive acquisitions, cost reductions, and energy-efficiency initiatives, alongside efforts to enhance electric infrastructure resilience and transition to renewable energy sources [1][3] - The maintenance and improvement of utilities' infrastructure relies heavily on capital expenditures for updating and modernizing assets to meet growing demand, particularly from data centers [2] Company Insights: Duke Energy (DUK) - Duke Energy is expanding its renewable energy footprint by promoting electric vehicle (EV) adoption and aims to electrify most of its vehicle fleet by 2030, having already reduced carbon emissions by 44% from 2005 levels [5][6] - The company plans to retire most of its coal capacity by 2030 and fully exit coal by 2035, with a long-term goal of achieving net-zero carbon emissions by 2050 [6] - Duke Energy anticipates capital expenditures of $190-$200 billion over the next decade, with $95-$105 billion expected during 2026-2030, and has invested $9.88 billion in the first nine months of 2025 [15] Company Insights: Exelon Corporation (EXC) - Exelon focuses on the transmission and distribution of clean energy, with a business model that provides stable earnings despite weather-related demand fluctuations, supported by decoupled distribution revenues [7][8] - The company serves over 10 million customers across seven regulatory jurisdictions and plans to invest nearly $38 billion during 2025-2028 to enhance grid reliability and customer needs [16] - Exelon's current return on equity (ROE) is 10.29%, slightly higher than Duke Energy's 9.98%, both outperforming the industry average of 9.9% [14] Financial Performance and Valuation - The Zacks Consensus Estimate for Duke Energy's earnings per share (EPS) indicates a year-over-year increase of 7.12% for 2025 and 6.1% for 2026, while Exelon's EPS is expected to rise by 8% and 4.26% for the same years [10][12] - Duke Energy's shares trade at a forward Price/Earnings (P/E) ratio of 17.55X, while Exelon's P/E is 15.74X, making Exelon relatively more attractive from a valuation perspective [18] Dividend Yield - Duke Energy has a dividend yield of 3.62%, while Exelon's yield is 3.61%, both significantly higher than the S&P 500 composite average of 1.1% [17] Investment Recommendation - Both Duke Energy and Exelon are positioned for growth through strategic investments in infrastructure and renewable energy, but Exelon is favored for its better near-term earnings growth, ROE, and valuation [19][20]