NEW YORK (TheStreet) -- Shares of Duke Energy (DUK) were falling 0.4% to $79.51 Thursday after the electric power holding company announced plans to permanently close its coal ash basins in North Carolina.
The company said its submitted detailed coal ash excavation plans to North Carolina's Department of Environment and Natural Resources for its four power plants in the state. North Carolina said all of the ash must be excavated by 2019.
Duke Energy said it plans to move about 5.1 tons of ash, about 30% of the total ash in the four sites, within 12 to 18 months after receiving approvals and permits from the North Carolina Department of Environment and Natural Resources.
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TheStreet Ratings team rates DUKE ENERGY CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate DUKE ENERGY CORP (DUK) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Electric Utilities industry average. The net income increased by 26.9% when compared to the same quarter one year prior, rising from $1,004.00 million to $1,274.00 million.
- 40.33% is the gross profit margin for DUKE ENERGY CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.90% is above that of the industry average.
- DUKE ENERGY CORP's earnings per share declined by 10.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DUKE ENERGY CORP increased its bottom line by earning $3.73 versus $3.06 in the prior year. This year, the market expects an improvement in earnings ($4.58 versus $3.73).
- DUK, with its decline in revenue, slightly underperformed the industry average of 5.7%. Since the same quarter one year prior, revenues slightly dropped by 4.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: DUK Ratings Report