Duke Energy Corporation (DUK): A Case Study

The portfolio project will be based on Duke Energy Corporation (DUK). Sector and Industry are utilities and electric utilities respectively. Duke Energy Corporation operates in three segments: regulated utilities, international energy and commercial power. DUK is an energy company headquartered in North Carolina. As a regulated utility company, more than 80% of the total assets are regulated (EEI, 2015), DUK is regulated by the Federal Energy Regulatory Commission along with many state service commissions. DUK, the largest electric power company (DUK, 2016) operates in multiple states in the United States along with Latin America (DUK, 2015). While some utility companies face direct completion in their service area, DUK operates in a

Not only is it more expensive that say natural gas, it has a profound impact on the environment. It harms ecosystems and pollutes the air. These costs along with some of the regulations discussed earlier make coal an expensive resource. As production cost with coal remain high, the shift to natural gas or some other resource will most likely continue (Ecotech, 2015). However, replacing coal is not a simple task; it requires increasing capacity of natural gas combined cycle plants. Increasing the industry’s reliance of natural gas poses vulnerability to the volatility of natural gas (PWC, 2016). How companies in the industry, including DUK, accommodate such changes will be a contributing factor to their long term

Finance, 2016), March 18, 2016, saw the highest trade price of 80.4 closing at 79.67 whereas the twelve month low was in the not so distant past on December 3, 2015 at 65.5 with a closing price of 65.53 (Yahoo! Finance). In February, DUK was downgraded by two financial institutions, JP Morgan and Wells Fargo (Yahoo! Finance, 2016) from overweight and outperform to neutral and market perform respectively. While these downgrades did not place DUK in a bad position, it puts them in line with other ratings issued by other institutions. Overall, DUK is still seen as a favorable in the industry with recommendations to buy or to hold (Yahoo! Finance,