Analyzing Duke Energy (NYSE:DUK) and Entergy (NYSE:ETR)

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

Analyst Recommendations

This is a summary of recent ratings for Entergy and Duke Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Entergy	0	2	20	0	2.91
Duke Energy	0	9	9	0	2.50

Entergy currently has a consensus target price of $121.57, suggesting a potential upside of 8.72%. Duke Energy has a consensus target price of $132.19, suggesting a potential upside of 2.50%. Given Entergy’s stronger consensus rating and higher probable upside, analysts clearly believe Entergy is more favorable than Duke Energy.

Earnings and Valuation

This table compares Entergy and Duke Energy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Entergy	$14.04 billion	3.81	$1.77 billion	$4.35	25.70
Duke Energy	$32.24 billion	3.12	$4.97 billion	$6.84	18.85

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

Institutional and Insider Ownership

88.1% of Entergy shares are owned by institutional investors. Comparatively, 65.3% of Duke Energy shares are owned by institutional investors. 0.2% of Entergy 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 large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Entergy pays an annual dividend of $2.72 per share and has a dividend yield of 2.4%. Duke Energy pays an annual dividend of $4.34 per share and has a dividend yield of 3.4%. Entergy pays out 62.5% of its earnings in the form of a dividend. Duke Energy pays out 63.5% 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. Entergy has increased its dividend for 10 consecutive years and Duke Energy has increased its dividend for 20 consecutive years. Duke Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Entergy has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500. Comparatively, Duke Energy has a beta of 0.33, suggesting that its stock price is 67% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Entergy	14.63%	11.44%	2.68%
Duke Energy	15.94%	9.82%	2.71%

Summary

Entergy beats Duke Energy on 10 of the 17 factors compared between the two stocks.

About Entergy

Entergy Corporation is an investor-owned energy company headquartered in New Orleans. Its primary business is providing regulated electric utility service to residential, commercial and industrial customers. Through its utility subsidiaries, Entergy serves communities in Arkansas, Louisiana, Mississippi and Texas. Its operations include generating, transmitting and distributing electricity, with power produced from a mix of sources that includes nuclear energy. The company traces its corporate history to Middle South Utilities, which adopted the Entergy name in 1989.

About Duke Energy

Duke Energy is a U.S. energy company focused primarily on regulated electric utilities and natural gas distribution. Its businesses generate, transmit and distribute electricity, and provide natural gas service to residential, commercial and industrial customers. The company serves electric customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky. Its natural gas distribution operations serve customers in several states, including North Carolina, South Carolina, Ohio, Kentucky and Tennessee.