Analyzing Duke Energy (NYSE: DUK): A Strong Contender Among Growing Dividend Stocks
In the realm of investment strategies, focusing on dividend stocks is a time-honored approach for those seeking both income and growth. Recently, we highlighted 30 Growing Dividend Stocks with Low P/E Ratios, and today, we’re delving into where Duke Energy Corporation (NYSE: DUK) fits within this framework.
The Value Stocks Landscape
This year has seen a notable shift as value stocks gain traction amidst a turbulent market. According to recent data, the S&P Value Index, which includes sectors such as banking, consumer staples, and healthcare, has only declined around 9% this year—much less than the greater than 15% drop seen in growth-focused stocks. This contrast has sparked a migration from high-growth to value investments.
Concerns over inflated valuations in the technology sector, exacerbated by economic uncertainty and increased risk aversion, have influenced this shift. Investors are beginning to believe that value-oriented stocks have the potential for better-than-expected earnings reports, especially during the upcoming earnings season.
Dan Morgan, Senior Portfolio Manager at Synovus Trust, sums it up succinctly:
“The bar has been set pretty low for value stocks compared to the uncertainty surrounding growth names and their ability to deliver on earnings estimates. If value can at least match or slightly beat expectations, the runway is clear for them.”
Earnings Expectations: A Diverging Path
Analysts from Bloomberg Intelligence are predicting a 12% decline in first-quarter earnings for value companies compared to the previous year. In contrast, growth companies are forecasted to experience a 20% increase. This disparity offers a perspective on the current market sentiment. Advocates for value stocks argue that these lowered expectations are already baked into their modest valuations, potentially providing a strategic entry point for savvy investors.
On the flip side, excitement surrounding growth stocks, particularly in tech, remains buoyant, largely propelled by advancements in artificial intelligence and other cutting-edge technologies.
Historical Context and Recent Performance
Historically, value stocks lagged behind their growth counterparts; over the past two decades, the S&P 500 Value Index has only bested its growth counterpart five times annually. The growth index outperformed by a staggering 600%, while the value index gained just 202%.
Michael O’Rourke, Chief Market Strategist at JonesTrading, noted:
“Growth is about 40% more expensive; this outperformance of value was very long overdue. Due to the incredible strength of the Magnificent Seven, too many investors crowded into growth thinking it won’t correct.”
The Consistency of Dividend-Paying Stocks
Investors often gravitate toward dividend stocks, especially in uncertain markets. Dan Lefkovitz from Morningstar Indexes notes that while dividend-growth stocks have underperformed in 2024, they historically show resilience during downturns and provide stable income streams. Companies boasting consistent dividend increases are typically robust and financially sound—traits that are invaluable when economic conditions become challenging.
Spotlight on Duke Energy Corporation
Duke Energy, a North Carolina-based holding company engaged in electricity and natural gas services, has been making headlines. As of April 22nd, the company’s forward P/E ratio stands at 19.08. Since the beginning of 2025, DUK has outperformed the broader market, climbing over 13%.
In the most recent quarter, Duke Energy reported an adjusted earnings per share of $1.66, marginally above expectations. Despite a revenue miss of approximately $294 million, due to adverse weather events and significant restoration expenses, the company’s ability to maintain profitability was highlighted by a 5% year-over-year income increase across its electric and gas divisions.
Duke Energy’s commitment to returning value to shareholders is evident; the company has consistently paid dividends for an impressive 99 years, lifting its payouts for 13 straight years. As of April 22, the dividend stands at $1.045 per share with a yield of 3.4%.
Conclusion: Is Duke Energy the Best Bet?
With a ranking of 24th among our highlighted growing dividend stocks, Duke Energy remains a solid option for dividend investors. However, for those seeking deeply undervalued investments with higher growth potential, we recommend exploring our latest analysis on a dirt-cheap dividend stock that trades at just 10 times its earnings, while doubling its earnings annually.
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Disclosure:
This article was originally published at Insider Monkey.
If you’re looking to form a solid investment strategy, stay tuned for more insights and recommendations from Extreme Investor Network—where informed investing meets strategic advantage.