Duke Energy Corporation (DUK) is a heavyweight in the U.S. electric utilities industry. It mainly operates in the U.S. and Latin America. In 2013, its operations had $24.6 billion in revenue. This translated into $8.6 billion of earnings before interest, tax, depreciation, and amortization (or EBITDA).
Its regulated utility operations serve 7.2 million electric retail customers in six states in the Southeast and Midwest. The area represents a population of ~21 million people. As of December 31, 2013, Duke Energy owned a generating capacity of 57,500 megawatts (or MW)—86% is regulated by government. The rest is used for its commercial and international business.
Duke outperformed the Index
Over the last five years, Duke gained over 56%—at a steady rate of 9.4% annually. During the same period, the DJ Utility Index grew by 49%. Duke outperformed this Index. Duke had a 10.83% weight in the Index as of December 2013. The market rewarded the stock. The company reported consistent growth in revenues and EBITDA.
Many companies within in the Utilities Select Sector SPDR (XLU)—like Southern Company (SO), Dominion Resources (D), and NextEra Corporation (NEE)—have yielded good returns for investors in the last five years.
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