Duke Energy vs NextEra Energy Which Should You Buy?

Duke Energy and NextEra Energy are two of the largest utility companies in the United States, each offering investors a potential opportunity for growth and dividends. Duke Energy is a well-established company with a focus on traditional energy sources, such as coal and natural gas, while NextEra Energy is a leader in renewable energy production, particularly in wind and solar. Both companies face unique challenges and opportunities in the changing energy landscape, making them interesting stocks to compare and consider for investment.

Duke Energy or NextEra Energy?

When comparing Duke Energy and NextEra Energy, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Duke Energy and NextEra Energy.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Duke Energy has a dividend yield of 3.8%, while NextEra Energy has a dividend yield of 2.8%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Duke Energy reports a 5-year dividend growth of 2.24% year and a payout ratio of 92.18%. On the other hand, NextEra Energy reports a 5-year dividend growth of -15.88% year and a payout ratio of 59.48%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Duke Energy P/E ratio at 19.43 and NextEra Energy's P/E ratio at 21.75. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Duke Energy P/B ratio is 1.71 while NextEra Energy's P/B ratio is 3.02.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Duke Energy has seen a 5-year revenue growth of 0.09%, while NextEra Energy's is 0.57%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Duke Energy's ROE at 8.76% and NextEra Energy's ROE at 14.24%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $108.74 for Duke Energy and $72.94 for NextEra Energy. Over the past year, Duke Energy's prices ranged from $90.09 to $121.25, with a yearly change of 34.59%. NextEra Energy's prices fluctuated between $53.95 and $86.10, with a yearly change of 59.59%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.