Giant U.S. electric and gas utility Duke Energy (NYSE: DUK) is a very boring company. However, with a generous 4.7% yield backed by 15 consecutive years of annual dividend increases, there are a lot of investors who would be very pleased to be bored here. But there's more to understand before you jump into Duke's stock. Here's a primer to help you decide if Duke is a buy or not.
Duke has three main lines of business that are all tied tightly together. Its largest is operating regulated electric utilities in six states, serving 7.7 million customers. Next up is its regulated natural gas distribution business, which serves 1.6 million customers across four states. The third business is a merchant power operation that generates and sells energy, increasingly solar and wind power, under long-term contract to others. Electricity is by far the largest business, and is expected to generate seven times the income of the natural gas operation in 2020. Natural gas, meanwhile, is about twice the size of the merchant power business.
Image source: Getty Images
Source Fool.com