Should You Invest in Duke Energy?

PHOTO CREDIT: Duke Energy

OVERVIEW

Duke Energy Corporation is one of the largest utility companies in the United States. It contracts with cities across the United States to generate electricity and natural gas and then distributes this to customers in those municipalities. They have millions of customers across several states. They also own and operate several energy production sites like solar and wind farms, and fuel cell farms.

Why You Should?

1. The COVID-19 Pandemic showed the resiliency of Duke Energy. As people stay indoors, Duke Energy has seen a spike in demand for residential energy solutions. This has stabilized the company’s sales at a time when other companies are filing for bankruptcy.
2. Duke Energy is one of the largest utility companies in the United States, making it a very safe and recession-proof investment. This is because the products (electricity and natural gas) that it offers are essential to maintain a high quality of life. This makes Duke Energy a very good investment for steady future growth.
3. Duke Energy has invested in clean energy solutions. They have expanded their operations in solar and wind farms as well as operating fuel cells at higher efficiencies. This positions the company well for the future growth in the clean energy space.
4. Duke Energy has seen rising revenues and profits over the past couple of years despite the heavy investments in the clean energy space. This will help the company’s future growth. This has benefited shareholders of the company as the company continues to share its profits. In the financial year of 2019, the company reported revenues of around 24.7 billion and profits of around 3.75 billion. Both of these metrics are higher than what the company reported i the financial year of 2018 when they reported revenues of around 24.1 billion and profits of around 2.7 billion.

PHOTO CREDIT: Yahoo Finance

Why You Should Not?

1. Duke Energy faces tough competition from other energy utility companies. Though they contract with other cities for long periods of times, it is not uncommon for cities to choose someone else for their energy solution needs. This might hurt the company’s future growth.
2. The COVID-19 Pandemic has also decimated the demand for energy solutions for commercial customers. As schools and stadiums remain closed due to government regulation, Duke has seen a drop of in demand for these solutions. This has hurt the company’s results over the past couple of quarters.

MY OPINION

In my opinion, I think that Duke Energy is a great long-term investment because of its place in a safe and recession proof industry. Investments in clean energy solutions will thrust the company into the future of energy solution. However, the COVID-19 Pandemic has hurt the company’s results and competition might hurt the company in the future.