VPU - The Good News in Duke Energy's Bad News: Is It a Buy?
2023-11-17 05:19:00 ET
Duke Energy 's (NYSE: DUK) shares are down around 17% from their 52-week high, roughly in line with the broader utility group, using Vanguard Utilities Index ETF (NYSEMKT: VPU) as a proxy. The big picture behind the drop is at least partly driven by rising interest rates, which make other income products, like CDs, more competitive. But there were also some worrying trends in Duke's third-quarter earnings results. The good news is that the bad news was hiding some positive trends.
You could probably buy a CD with a yield that's exactly the same as Duke's roughly 4.6% dividend yield . The problem is that the income CDs provide doesn't increase over time, while Duke's dividend has been increased annually for 19 consecutive years. To be fair, the average annualized increase over the past decade was a bit miserly at 2.5% or so.
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The Good News in Duke Energy's Bad News: Is It a Buy?