Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Duke Energy Corp (DUK), American Electric Power Company Inc (AEP): Which Utilities Company Can Make You Rich?

For many years, utility stocks have been considered solid and reliable investments. Customer electricity demand grows, and utilities benefit while investors feel excited. However, those times may be about to change. In this article, I aim to deliver a clearer picture on where the utilities, Duke Energy Corp (NYSE:DUK) and American Electric Power Company Inc (NYSE:AEP) stand. My argument makes a largely statistical case for suggesting which stock is the best bet for your profits.

Duke Energy CorpBusiness updates

Great Plains Energy Incorporated (NYSE:GXP) has a diverse generation platform of more than 6,600 MW of capacity. The company’s generation mix is largely dominated by coal. Coal is used for 83% of the power generation, while nuclear fuel makes up approximately 14% of the remaining generation. At a time when gas prices were significantly lower and the Environment Protection Agency was hot on the heels of utility providers, urging them to switch to cleaner sources of fuel, Great Plains Energy Incorporated (NYSE:GXP) stuck with coal production and is now placed better than its competitors as gas prices have skyrocketed.

Duke Energy Corp (NYSE:DUK) develops cost saving initiatives to reach earnings base growth. On May 30, the company received rate case approval from North Carolina Utilities commission. That provides the total increase in rates of $178.7 million, or an average increase of 5.5% for all customers, over the 2013-2014 periods. Nevertheless, even with the approved rate increase, the company’s rates remain below the national average. The approved rate increase will be used to recover investments already made to modernize the system and ensure safe and reliable service for customers every day.

American Electric Power Company Inc (NYSE:AEP) delivers electricity to more than 5 million customers in 11 states. On July 17, the company terminated its $1 billion credit agreement, dated February 13, 2013, and entered into a $1 billion Term Credit Agreement, dated as of July 17, 2013. This is a replacement Credit Agreement entered into to provide additional liquidity during the corporate separation process for Ohio Power Company.

Financials and stock performance

Great Plains Energy’s EPS has been fluctuating for the last 5 years, making a gain one year and having a dismal performance in the next. The company’s payout ratio is at 63% and is not very promising, especially when the utility company’s dividend payment was almost twice the current amount in 2004, while having a payout ratio in the 60%-range.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.