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NEE vs. DUK: Which Utility Stock Has Better Growth Potential Now?
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Key Takeaways
{\"0\":\"NEE\'s ROE of 12.31% far exceeds DUK\'s 9.85% and the industry average of 10.35%.\",\"1\":\"Earnings estimates for NEE in 2025 and 2026 are increasing y/y at a higher rate than DUK.\",\"2\":\"DUK offers a higher dividend yield at 3.52%, but NEE offers a cheaper valuation.\"}
The Zacks Utility - Electric Power industry offers a strong case for stable, long-term income, backed by its regulated structure. Regulations enable utilities to recover costs and generate consistent returns, which helps minimize earnings volatility. With electricity demand remaining steady across economic cycles and dividend yields that are generally attractive, the sector stands out as a dependable, defensive choice for income-focused investors. Since utility operations are highly capital-intensive, the recent decline in interest rates is particularly favorable, as it lowers financing costs for long-term projects.
The U.S. electric utilities industry is evolving past its conventional role as a stable income provider, driven by the rapid transition toward clean energy. Large-scale investments in grid modernization, renewable integration, and electrification are well supported by federal incentives and climate-focused policies are reshaping the sector. Utilities leading this transformation are well-placed to achieve sustainable long-term growth, offering investors a comparatively lower-risk pathway to participate in the expanding green energy economy. NextEra Energy (NEE - Free Report) and Duke Energy (DUK - Free Report) are prominent U.S. electric utilities actively investing in renewable energy, making them pivotal players in the shift toward cleaner power generation.
NextEra Energy is recognized for its focus on renewable energy and sustainable growth. Through significant investments in wind, solar, battery storage and grid modernization, the company is spearheading the clean energy transition. As the parent of Florida Power & Light and NextEra Energy Resources, it manages one of the world’s largest portfolios of wind and solar projects. Backed by solid financials and a proven record of innovation, NEE offers investors a compelling mix of stability and long-term growth aligned with the green energy movement.
Duke Energy, one of the nation’s largest utilities, is also advancing steadily in its clean energy transformation. The company has set ambitious goals, including reducing carbon emissions by 50% by 2030 and reaching net-zero by 2050, alongside plans to double renewable capacity by 2030 and eliminate coal generation by 2035. With continued investment in modern infrastructure and cleaner technologies, Duke delivers stable, regulated returns while positioning itself for sustainable, long-term growth.
Together, NextEra Energy and Duke Energy represent two of the most influential players in the utility sector. A closer comparison of their fundamentals can help identify which stock offers the stronger investment opportunity.
NEE & DUK’s Earnings Growth Projections
The Zacks Consensus Estimate for NextEra Energy’s earnings per share in 2025 and 2026 has increased year-over-year by 7.29% and 7.91%, respectively. Long-term (three to five years) earnings growth per share is pegged at 7.89%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Duke Energy’s earnings per share in 2025 and 2026 has increased year-over-year by 7.12% and 6.06%, respectively. Long-term (three to five years) earnings growth per share is pegged at 6.56%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
Return on Equity (ROE) is an important measure of financial performance that indicates how efficiently a company converts shareholder equity into profits. It highlights management’s effectiveness in utilizing invested capital to grow earnings and enhance shareholder value.
NEE’s current ROE is 12.31% compared with DUK’s 9.85%. NEE also outperforms the industry’s ROE of 10.35%.
Image Source: Zacks Investment Research
Debt to Capital
The Zacks Utilities sector is a capital-intensive one, and huge investments are required at regular intervals to upgrade, maintain and expand operations. The usage of new evolving technology also requires investments. So, the utilities borrow from the market and add it to their internal cash generation to fund their long-term investments.
NextEra Energy’s debt-to-capital currently stands at 60.48% compared with Duke Energy’s debt-to-capital of 62.69%. Both companies are using debt to fund their business. NextEra Energy’s debt level is marginally lower than the industry’s debt-to-capital, which stands at 60.89%.
Capital Expenditure Plans
Capital expenditure is critical in the sector, as it drives infrastructure development, system reliability, and long-term growth. Utilities must consistently invest in power generation, transmission, and distribution networks to meet rising demand, integrate renewable energy sources, and comply with evolving regulatory standards.
NextEra Energy plans to invest nearly $74.6 billion in the 2025-2029 period to strengthen its infrastructure and add more clean electricity generation assets. Duke Energy plans to invest $87 billion in the 2025-2029 period to strengthen its electric transmission, distribution and generation infrastructure. Both companies have strong capital investment plans, and the decline in interest rates will lower the capital servicing expenses and be beneficial to both companies.
NEE & DUK’s Dividend Yield
Dividends are regular payments made by a company to its shareholders and represent a direct way for investors to earn a return on their investment. They are an important indicator of a company’s financial health and stability, often signaling strong cash flow and consistent earnings. Utilities are known for regular dividend payments to their shareholders.
Currently, the dividend yield for NextEra Energy is 3.19%, while that for Duke Energy is 3.52%. The dividend yields of both companies are higher than the S&P 500’s yield of 1.52%.
Valuation
NextEra Energy currently appears to be a tad cheaper compared with Duke Energy on a Price/Earnings Forward 12-month basis. (P/E- F12M).
NEE is currently trading at 18.21X, while DUK is trading at 18.26X compared with their industry’s 14.43X.
Image Source: Zacks Investment Research
Conclusion
NextEra Energy and Duke Energy are investing heavily in their infrastructure to serve millions of customers across the United States.
NEE’s better movement in earnings estimates, stronger ROE, and cheaper valuation make it a better choice in the utility space.
Based on the above discussion, NextEra Energy currently has an edge over Duke Energy, and also presently carries a Zacks Rank #2 (Buy) compared with Duke Energy’s Zacks Rank #3 (Hold).
Image: Bigstock
NEE vs. DUK: Which Utility Stock Has Better Growth Potential Now?
Key Takeaways
The Zacks Utility - Electric Power industry offers a strong case for stable, long-term income, backed by its regulated structure. Regulations enable utilities to recover costs and generate consistent returns, which helps minimize earnings volatility. With electricity demand remaining steady across economic cycles and dividend yields that are generally attractive, the sector stands out as a dependable, defensive choice for income-focused investors. Since utility operations are highly capital-intensive, the recent decline in interest rates is particularly favorable, as it lowers financing costs for long-term projects.
The U.S. electric utilities industry is evolving past its conventional role as a stable income provider, driven by the rapid transition toward clean energy. Large-scale investments in grid modernization, renewable integration, and electrification are well supported by federal incentives and climate-focused policies are reshaping the sector. Utilities leading this transformation are well-placed to achieve sustainable long-term growth, offering investors a comparatively lower-risk pathway to participate in the expanding green energy economy. NextEra Energy (NEE - Free Report) and Duke Energy (DUK - Free Report) are prominent U.S. electric utilities actively investing in renewable energy, making them pivotal players in the shift toward cleaner power generation.
NextEra Energy is recognized for its focus on renewable energy and sustainable growth. Through significant investments in wind, solar, battery storage and grid modernization, the company is spearheading the clean energy transition. As the parent of Florida Power & Light and NextEra Energy Resources, it manages one of the world’s largest portfolios of wind and solar projects. Backed by solid financials and a proven record of innovation, NEE offers investors a compelling mix of stability and long-term growth aligned with the green energy movement.
Duke Energy, one of the nation’s largest utilities, is also advancing steadily in its clean energy transformation. The company has set ambitious goals, including reducing carbon emissions by 50% by 2030 and reaching net-zero by 2050, alongside plans to double renewable capacity by 2030 and eliminate coal generation by 2035. With continued investment in modern infrastructure and cleaner technologies, Duke delivers stable, regulated returns while positioning itself for sustainable, long-term growth.
Together, NextEra Energy and Duke Energy represent two of the most influential players in the utility sector. A closer comparison of their fundamentals can help identify which stock offers the stronger investment opportunity.
NEE & DUK’s Earnings Growth Projections
The Zacks Consensus Estimate for NextEra Energy’s earnings per share in 2025 and 2026 has increased year-over-year by 7.29% and 7.91%, respectively. Long-term (three to five years) earnings growth per share is pegged at 7.89%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Duke Energy’s earnings per share in 2025 and 2026 has increased year-over-year by 7.12% and 6.06%, respectively. Long-term (three to five years) earnings growth per share is pegged at 6.56%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
Return on Equity (ROE) is an important measure of financial performance that indicates how efficiently a company converts shareholder equity into profits. It highlights management’s effectiveness in utilizing invested capital to grow earnings and enhance shareholder value.
NEE’s current ROE is 12.31% compared with DUK’s 9.85%. NEE also outperforms the industry’s ROE of 10.35%.
Image Source: Zacks Investment Research
Debt to Capital
The Zacks Utilities sector is a capital-intensive one, and huge investments are required at regular intervals to upgrade, maintain and expand operations. The usage of new evolving technology also requires investments. So, the utilities borrow from the market and add it to their internal cash generation to fund their long-term investments.
NextEra Energy’s debt-to-capital currently stands at 60.48% compared with Duke Energy’s debt-to-capital of 62.69%. Both companies are using debt to fund their business. NextEra Energy’s debt level is marginally lower than the industry’s debt-to-capital, which stands at 60.89%.
Capital Expenditure Plans
Capital expenditure is critical in the sector, as it drives infrastructure development, system reliability, and long-term growth. Utilities must consistently invest in power generation, transmission, and distribution networks to meet rising demand, integrate renewable energy sources, and comply with evolving regulatory standards.
NextEra Energy plans to invest nearly $74.6 billion in the 2025-2029 period to strengthen its infrastructure and add more clean electricity generation assets. Duke Energy plans to invest $87 billion in the 2025-2029 period to strengthen its electric transmission, distribution and generation infrastructure. Both companies have strong capital investment plans, and the decline in interest rates will lower the capital servicing expenses and be beneficial to both companies.
NEE & DUK’s Dividend Yield
Dividends are regular payments made by a company to its shareholders and represent a direct way for investors to earn a return on their investment. They are an important indicator of a company’s financial health and stability, often signaling strong cash flow and consistent earnings. Utilities are known for regular dividend payments to their shareholders.
Currently, the dividend yield for NextEra Energy is 3.19%, while that for Duke Energy is 3.52%. The dividend yields of both companies are higher than the S&P 500’s yield of 1.52%.
Valuation
NextEra Energy currently appears to be a tad cheaper compared with Duke Energy on a Price/Earnings Forward 12-month basis. (P/E- F12M).
NEE is currently trading at 18.21X, while DUK is trading at 18.26X compared with their industry’s 14.43X.
Image Source: Zacks Investment Research
Conclusion
NextEra Energy and Duke Energy are investing heavily in their infrastructure to serve millions of customers across the United States.
NEE’s better movement in earnings estimates, stronger ROE, and cheaper valuation make it a better choice in the utility space.
Based on the above discussion, NextEra Energy currently has an edge over Duke Energy, and also presently carries a Zacks Rank #2 (Buy) compared with Duke Energy’s Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.