Market Playground

By Jim Van Meerten

While screening on Barchart for S&P 500 companies having current price momentum I found Duke Energy (NYSE:DUK) near the top of the list with 14 new highs in the last 2 trading sessions.  Duke is looking to increase sales and its coverage with the acquisition of Progress Energy and the building of 2 new gas-fired and 1 new coal-fired plants.  With a 5.1% dividend and current price momentum it deserves a look.

Duke Energy Corporation (NYSE:DUK) is an integrated energy and energy services provider with the ability to offer physical delivery and management of both electricity and natural gas throughout the U.S. and abroad. Duke Energy provides these and other services through seven business segments: Electric Operations; Natural Gas Transmission; Field Services; Trading and Marketing; Global Asset Development; Other Energy Services; Real Estate Operations.

Factors to Consider:

Technical Factors:

• 72% Barchart technical buy signal
• Trend Spotter buy signal
• Above 20, 50 and 100 day moving averages
• 14 new highs and up 4.39% in the last month
• Relative Strength Index 65.39% and rising
• Trades around 19.01 with a 50 day moving average of 18.21

Fundamental Factors:

• A core holding for income investors at most brokerages with 16 recommending a hold on these shares
• Sales are projected to increase by 3.20% next year
• Earnings are forecasts to increase by 2.20% next year and continue by an increase of 4.33% annually for the next 5 years.

General Investor Sentiment:

• On Motley Fool which normally has a growth following a surprising number of readers think the stock will out perform the market and 2,374 readers express an opinion
• CAPS members vote 1,770 to 80 that the stock will beat the market
• All Stars agree with a 508 to 16 vote

Summary:

Normally an electric utility is an income stock. Duke Energy (DUK) pays a solid 5.1% dividend with a 70% earnings payout. Long term investors might see an annual 7.00% total return over the next 5 years.

Jim Van Meerten is a professional investor with over 40 year experience in investing in stocks, mutual funds and ETFs. He shares his knowledge on Barchart in his daily blogs – Barchart Portfolio Blog.