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Duke Energy Corporation Annual Valuation – 2014 $DUK


Duke Energy Corporation presents a speculative situation, as it does not qualify for either the Defensive Investor or the Enterprising Investor. The Defensive Investor is concerned with the low current ratio, an insufficient level of earnings growth over the last ten years, and the high PEmg ratio. The Enterprising Investor takes issue with the level of debt relative to the current assets. As a result, any purchase of Duke Energy stock is made with a speculative nature behind it. That said, any speculator interested in pursuing the company should still proceed to the next part of the analysis, which is a determination of the company’s intrinsic value.

With regard to that intrinsic value, the company has grown its EPSmg (normalized earnings) from $3.09 in 2010 to only an estimated $3.79 for 2014. This level of demonstrated growth does not support the market’s implied estimate for earnings growth of 6.50% over the next 7-10 years. The ModernGraham valuation model therefore returns an estimate of intrinsic value below the current price, indicating the company is overvalued at the present time.

Read the full valuation on Seeking Alpha!

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