Assessing the Sustainability and Growth of Duke Energy's Dividends
Duke Energy Corp (DUK, Financial) recently announced a dividend of $1.03 per share, payable on 2023-12-18, with the ex-dividend date set for 2023-11-16. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Duke Energy Corp's dividend performance and assess its sustainability.
What Does Duke Energy Corp Do?
Duke Energy is one of the largest U.S. utilities, with regulated utilities in the Carolinas, Indiana, Florida, Ohio, and Kentucky that deliver electricity to 8.2 million customers. Its natural gas utilities serve more than 1.6 million customers. Duke agreed to sell its commercial renewable energy in mid-2023.
A Glimpse at Duke Energy Corp's Dividend History
Duke Energy Corp has maintained a consistent dividend payment record since 1986, distributed on a quarterly basis. Duke Energy Corp has increased its dividend each year since 2007, earning it the status of a dividend achiever, a distinction reserved for companies that have consistently raised their dividends for at least 16 years. Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down Duke Energy Corp's Dividend Yield and Growth
Duke Energy Corp currently has a 12-month trailing dividend yield of 4.52% and a 12-month forward dividend yield of 4.55%, indicating an expected increase in dividend payments over the next year. Over the past three years, Duke Energy Corp's annual dividend growth rate was 2.00%, which increased to 2.60% per year over a five-year period, and over the past decade, the annual dividends per share growth rate stands at 3.00%. The 5-year yield on cost for Duke Energy Corp stock is approximately 5.14% as of today.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one must consider the company's payout ratio. Duke Energy Corp's dividend payout ratio is 0.85 as of 2023-09-30, which may raise concerns about sustainability. However, Duke Energy Corp's profitability rank of 7 out of 10, as of 2023-09-30, suggests good profitability prospects, with a consistent record of positive net income over the past decade.
Growth Metrics: The Future Outlook
Duke Energy Corp's growth rank of 7 out of 10 indicates a good growth trajectory relative to competitors. However, its revenue per share and 3-year revenue growth rate, at 2.80% per year, underperforms approximately 73.72% of global competitors. The 3-year EPS growth rate, at 0.70% per year, underperforms approximately 58.82% of global competitors, and the 5-year EBITDA growth rate, at 0.50%, underperforms approximately 63.87% of global competitors.
Next Steps
In conclusion, while Duke Energy Corp's dividend payments have shown consistent growth, investors should be mindful of the high payout ratio, which may call into question the long-term sustainability of these dividends. The company's strong profitability rank and dividend achiever status provide some reassurance, yet growth metrics suggest there are areas where Duke Energy Corp lags behind its peers. Value investors should weigh these factors carefully when considering Duke Energy Corp as a potential investment for steady income. For those seeking high-dividend yield opportunities, GuruFocus Premium offers a High Dividend Yield Screener to discover stocks that meet specific dividend criteria.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
