Duke Energy Corporation
(
DUK
) raised the quarterly cash dividend on its common stock by 5 cents
to 25.5 cents per share. This action increases the annualized
dividend from 98 cents to $1.02. The dividend is payable on
September 17, 2012 to shareholders of record at the close of
business on August 17, 2012. This is the 86th consecutive year that
Duke Energy has paid a quarterly cash dividend on its common stock.
Earlier, in January 2011, Duke Energy announced that it would buy
Progress Energy Inc.
(
PGN
). Raleigh, North Carolina-based Progress Energy is a pure-play
electricity utility with a solid rate base growth opportunity in
the long term. The company engages in regulated electricity
operations in the southeastern U.S. and also runs non-regulated
businesses.
The $16.5 billion transaction is expected to be completed by July
2012. Once the transaction gets through, it would create the
largest U.S. utility and increase its ability to build new power
plants to meet future greenhouse-gas emissions limits. Currently,
Chicago-based
Exelon Corporation
(
EXC
) is the largest U.S. utility.
Duke Energy also announced a 1-for-3 reverse stock split, following
the anticipated closing of its merger with Progress Energy, on or
about July 1. Duke Energy also said that the dividend will be
automatically adjusted to $0.765, if the merger is closed on or
prior to the dividend record date.
Duke Energy, a Zacks #2 Rank ('Buy') stock, is one of the largest
electric power holding companies in the United States. Duke
Energy's stable U.S. electricity and gas operations (spread over
the five states of North Carolina, South Carolina, Indiana, Ohio
and Kentucky) generate a relatively stable and growing earnings
stream. Looking ahead, Duke Energy's merger with Progress Energy,
Inc. is expected to be a strategic fit and accretive to earnings.
The combined entity would provide regulated electricity services to
more than 7.1 million customers in 6 states (North Carolina, South
Carolina, Florida, Indiana, Ohio, and Kentucky). The merger is
expected to keep the company's long-term goal of 4% 6% earnings
growth in good stead.
Looking ahead, our bullish outlook for the company is supported by
higher rates, its strong balance sheet, ongoing capital expansion
projects and an above-average dividend yield for the industry.
We have a long-term Neutral recommendation on the Duke Energy
stock.
DUKE ENERGY CP (DUK): Free Stock Analysis
Report
EXELON CORP (EXC): Free Stock Analysis Report
PROGRESS ENERGY (PGN): Free Stock Analysis
Report
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