Comparing Exelon (EXC) and Duke Energy (DUK)

Exelon (NYSE: EXC) and Duke Energy (NYSE:DUK) are both large-cap utilities companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, valuation, dividends and profitability.

Dividends

Exelon pays an annual dividend of $1.31 per share and has a dividend yield of 3.1%. Duke Energy pays an annual dividend of $3.56 per share and has a dividend yield of 4.0%. Exelon pays out 58.7% of its earnings in the form of a dividend. Duke Energy pays out 117.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Duke Energy has increased its dividend for 10 consecutive years. Duke Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Exelon has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500. Comparatively, Duke Energy has a beta of 0.26, meaning that its stock price is 74% less volatile than the S&P 500.

Insider and Institutional Ownership

77.5% of Exelon shares are owned by institutional investors. Comparatively, 57.3% of Duke Energy shares are owned by institutional investors. 0.7% of Exelon shares are owned by company insiders. Comparatively, 0.1% of Duke Energy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and price targets for Exelon and Duke Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Exelon 1 3 11 0 2.67
Duke Energy 1 10 2 0 2.08

Exelon presently has a consensus target price of $40.88, suggesting a potential downside of 1.93%. Duke Energy has a consensus target price of $86.55, suggesting a potential downside of 2.76%. Given Exelon’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Exelon is more favorable than Duke Energy.

Profitability

This table compares Exelon and Duke Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Exelon 6.59% 8.19% 2.02%
Duke Energy 9.09% 7.54% 2.31%

Earnings & Valuation

This table compares Exelon and Duke Energy’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Exelon $31.36 billion 1.28 $1.13 billion $2.23 18.70
Duke Energy $22.74 billion 2.74 $2.15 billion $3.03 29.37

Duke Energy has lower revenue, but higher earnings than Exelon. Exelon is trading at a lower price-to-earnings ratio than Duke Energy, indicating that it is currently the more affordable of the two stocks.

Summary

Exelon beats Duke Energy on 9 of the 17 factors compared between the two stocks.

About Exelon

Exelon Corporation is a utility services holding company. The Company, through its subsidiary, Exelon Generation Company, LLC (Generation), is engaged in the energy generation business. The Company, through its subsidiaries, Commonwealth Edison Company (ComEd), PECO Energy Company (PECO), Baltimore Gas and Electric Company (BGE), Pepco Holdings LLC (PHI), Potomac Electric Power Company (Pepco), Delmarva Power & Light Company (DPL) and Atlantic City Electric Company (ACE), is engaged in the energy delivery businesses. It operates through 12 segments: Generation’s six segments: Mid-Atlantic, Midwest, New England, New York, ERCOT and Other Power Regions; ComEd; PECO; BGE, and PHI’s three utility segments: Pepco, DPL and ACE. Generation’s integrated business consists of the generation, physical delivery and marketing of power across geographical regions through its customer-facing business, Constellation, which sells electricity and natural gas to both wholesale and retail customers.

About Duke Energy

Duke Energy Corporation (Duke Energy) is an energy company. The Company operates through three segments: Electric Utilities and Infrastructure; Gas Utilities and Infrastructure, and Commercial Renewables. The Company operates in the United States through its direct and indirect subsidiaries. The Electric Utilities and Infrastructure segment provides retail electric service through the generation, transmission, distribution and sale of electricity to approximately 7.5 million customers within the Southeast and Midwest regions of the United States. The operations include electricity sold wholesale to municipalities, electric cooperative utilities and other load-serving entities. The Gas Utilities and Infrastructure segment serves residential, commercial, industrial and power generation natural gas customers. The Commercial Renewables primarily acquires, builds, develops and operates wind and solar renewable generation throughout the continental United States.

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