Head to Head Review: Duke Energy (NYSE:DUK) versus PPL (NYSE:PPL)

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

Volatility & Risk

Duke Energy has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500. Comparatively, PPL has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.

Earnings & Valuation

This table compares Duke Energy and PPL”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Duke Energy	$32.24 billion	2.79	$4.97 billion	$6.66	17.32
PPL	$9.04 billion	2.82	$1.18 billion	$1.69	20.06

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

Dividends

Duke Energy pays an annual dividend of $4.34 per share and has a dividend yield of 3.8%. PPL pays an annual dividend of $1.14 per share and has a dividend yield of 3.4%. Duke Energy pays out 65.2% of its earnings in the form of a dividend. PPL pays out 67.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Duke Energy has increased its dividend for 20 consecutive years and PPL has increased its dividend for 3 consecutive years. Duke Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Duke Energy	15.78%	9.78%	2.67%
PPL	13.47%	9.33%	3.05%

Institutional and Insider Ownership

65.3% of Duke Energy shares are held by institutional investors. Comparatively, 77.0% of PPL shares are held by institutional investors. 0.1% of Duke Energy shares are held by company insiders. Comparatively, 0.3% of PPL shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Duke Energy and PPL, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Duke Energy	0	8	10	0	2.56
PPL	0	4	9	1	2.79

Duke Energy presently has a consensus price target of $136.62, indicating a potential upside of 18.42%. PPL has a consensus price target of $40.21, indicating a potential upside of 18.64%. Given PPL’s stronger consensus rating and higher possible upside, analysts clearly believe PPL is more favorable than Duke Energy.

About Duke Energy

Duke Energy Corporation, together with its subsidiaries, operates as an energy company in the United States. It operates through two segments: Electric Utilities and Infrastructure (EU&I), and Gas Utilities and Infrastructure (GU&I). The EU&I segment generates, transmits, distributes, and sells electricity in the Carolinas, Florida, and the Midwest. It generates electricity through coal, hydroelectric, natural gas, oil, solar and wind sources, renewables, and nuclear fuel. This segment also engages in the wholesale of electricity to municipalities, electric cooperative utilities, and load-serving entities. The GU&I segment distributes natural gas to residential, commercial, industrial, and power generation natural gas customers; and invests in pipeline transmission projects, renewable natural gas projects, and natural gas storage facilities. The company was formerly known as Duke Energy Holding Corp. and changed its name to Duke Energy Corporation in April 2006. Duke Energy Corporation was founded in 1904 and is headquartered in Charlotte, North Carolina.

About PPL

PPL Corporation, an energy company, focuses on providing electricity and natural gas to approximately 3.6 million customers in the United States. It operates through three segments: Kentucky Regulated, Pennsylvania Regulated, and Rhode Island Regulated. The company delivers electricity to customers in Pennsylvania, Kentucky, Virginia, and Rhode Island; delivers natural gas to customers in Kentucky and Rhode Island; and generates electricity from power plants in Kentucky. PPL Corporation was founded in 1920 and is headquartered in Allentown, Pennsylvania.