Duke Energy: A Perfect Stock For Conservative Investors

Are you looking for a solid stock with predictable returns? Are you a conservative investor who is not looking for a lot of risk? Then Duke Energy (NYSE: DUK) is the perfect stock for you.

As a utility company, Duke Energy has everything going for it. They have made strategic moves that have paid off and as a result, they have become the largest utility in the United States. During this time, it seemed as though Wall Street shunned the stock, not realizing what the future held for this company.

But Wall Street has since noticed and the stock price is now close to $90 a share. But I think it can go much higher. Below, you will find out why Duke Energy is a perfect stock to own.

The Business Of Duke Energy

A few short years ago, Duke Energy was a utility company that relied heavily on coal for power. But in the last few years, the electric giant has shuttered coal and turned to natural gas and other renewable energy sources as the United States pushes utilities to begin using more and more cleaner energy.

The move has paid off.

Currently, about 90% of Duke’s business is in the regulated market. This means that prices are controlled by the government. On the one hand, this looks like a problem, seeing as how it will slow growth. But by dealing with a regulated market, Duke Energy and its shareholders can more easily predict future earnings. In other words, the more regulated the market, the more stable the company and the stock.

Of course, in order to survive as a business you need customers. Duke has continued to increase both commercial and residential customers annually and in both their electric and natural gas segments.

When Duke Energy recently reported earnings, they missed on earnings per share by $0.01 coming in at $1.01. Revenues also missed, this time by $640 million, coming in at $5.16 billion. However, this was an increase of 3% compared to the prior year.

Even with the miss in estimates, Duke Energy reaffirmed full year 2017 earnings.