When examining revenue, Duke Energy demonstrates a higher overall figure, reporting approximately $25 billion in 2019 compared to NextEra’s $19.3 billion. However, digging deeper into revenue dynamics reveals a significant difference in growth trajectory. NextEra Energy exhibits a robust revenue growth rate, averaging over 6% in the preceding 3 years, substantially outpacing Duke Energy’s more modest growth of around 3%. This variance in growth rate signals different strategic directions and market positioning, crucial for investors considering long-term potential.
Analyzing generation capacity, both utilities operate on a massive scale. NextEra Energy slightly edges out Duke Energy with approximately 53 gigawatts (GW) compared to Duke’s 51 GW. However, the fuel mix tells a more nuanced story. Duke Energy’s generation portfolio is fairly diversified across Natural Gas, Nuclear, and Coal, each contributing roughly 31% to 34% of its generated units in 2018. In contrast, NextEra’s FPL is heavily reliant on Natural Gas (73%) with a significant portion from Nuclear (22%), indicating a different approach to energy sourcing and potentially different exposures to fuel price volatility and environmental regulations.
In terms of customer reach, Duke Energy serves a larger customer base, exceeding 7.7 million customers, while NextEra’s FPL serves around 5 million. A larger customer base can provide stability and a broad revenue foundation, but growth opportunities might vary based on geographic and demographic factors within their service areas.
Profitability metrics reveal a notable advantage for NextEra Energy. NextEra’s operating margins are projected to be around 30%, significantly higher than Duke Energy’s approximately 20%. This margin difference could stem from NextEra’s investments in renewable energy assets and its strategic focus on the rapidly growing Florida market. Higher margins translate to greater earnings efficiency and potentially more financial flexibility for future investments and shareholder returns.
Earnings per share (EPS) growth further distinguishes the two companies. NextEra Energy has demonstrated impressive adjusted EPS growth, projected to rise from $6.20 in 2016 to $8.40 in 2019, achieving a compound annual growth rate (CAGR) exceeding 10%. Duke Energy’s EPS growth, in contrast, is more modest, expected to increase from $4.70 to $4.87 over the same period, representing a CAGR of only 1%. This substantial difference in EPS growth underscores NextEra’s stronger earnings momentum and potentially higher return on equity.
Examining debt levels, Duke Energy carries a higher total debt burden, standing at $58 billion in 2018, compared to NextEra’s $38 billion. Higher debt can increase financial risk and interest expenses, potentially impacting profitability and financial stability, especially in environments with rising interest rates.
Finally, valuation metrics reflect market perception and investor expectations. Duke Energy trades at a price-to-earnings (P/E) multiple of approximately 19x its projected 2020 earnings, based on a market price of around $90 per share. NextEra Energy, however, commands a premium valuation, trading at about 27x its 2020 earnings, with a market price of approximately $245. This higher valuation for NEE is likely attributed to its superior revenue growth, higher operating margins, and lower debt load, signaling investor confidence in its future performance and growth prospects compared to NYSE:DUK.
In conclusion, while Duke Energy boasts a larger revenue base and customer count, NextEra Energy distinguishes itself through stronger revenue growth, superior operating margins, and more robust EPS growth. NextEra also benefits from a lower debt profile and a higher market valuation, reflecting its growth-oriented strategy and renewable energy focus. Investors weighing “nyse duk compare” decisions must consider these nuanced differences, aligning their investment strategy with their risk appetite and growth expectations within the dynamic utilities landscape. For a more in-depth analysis, exploring interactive dashboards can provide further insights into the comparative performance of these utility giants.
