Duke Energy (NYSE: DUK) -- Earlier in the year I reported that the Dow Jones Utility Index had beaten the Industrials across the board for six-month, year-to-date, one-year, three-year, five-year and 10-year periods. Another vote for boring stocks. If you follow the reported activities of Warren Buffet over the past few years you will also find he has been acquiring utilities for Berkshire Hathaway. Now factor in a very good dividend yield of 3.86% and you might be compelled to consider this stock.
In January, Spectra Energy, the natural gas operator, will be going its own way as a separate company. Management believes this will be a catalyst to increase shareholder value. It has been reported in Barron's and elsewhere that senior managers holds a lot of stock themselves, so they have plenty of incentive to make this deal work. (Read the Company Profile).
I cannot say that DUK is cheap. It closed yesterday at $33.17, near its 52 week high of $34.50 and its P/E is 17.46 -- about average for large cap stocks, but high for a utility. The other metrics are also average, but there is plenty here to at least justify putting it on investors' watch list to facilitate picking some up on an off day or week. Come this time next year, I think it will be higher. Remember that utility companies have a captive audience -- I mean customer -- so there is some downside protection.
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