Utility stocks don't often rank highly on the sexy scale, but you would be hard-pressed to find a more attractive name than Duke Energy (DUK - Get Report) . With its 4.00%+ dividend yield and share buybacks, Duke Energy has tons powerful ways to reward shareholders in the quarters and years ahead. So with the stock trading today at around $85, expecting 10% gains or a price of $95 is possible in the next six to 12 months.
Duke Energy didn't excite investors with breathtaking earnings results Thursday. But despite the company's 6% decline in second quarter profits, the company still beat the consensus estimate. Just as important, Duke Energy is now looking for ways to boost its cash by looking to divest valuable overseas assets.
With its $4.9 billion deal for North Carolina-based Piedmont Natural Gas (PNY) still on schedule, now would be a wrong time to bail on this company. Take a look at the chart, courtesy of TradingView.
As you can see, despite the peaks and valleys, the stock has been a profitable trade since early March. Since the middle of May, the shares have risen some 15%, reaching a 52-week high of $87.31. From the top of the red line, you can see that since its peak, Duke stock has seen tons of resistance. Just as important, the stock has shown solid support at $84 per share.
As it stands, even with the long-term trend calling for $95 per share, or 10% gains, the spread between the 52-week high and support is now just $3. This narrow difference suggest minimal volatility in DUK shares for the foreseeable future. Just as important, this means that the 20-day moving average of $85.40 (blue line) -- unlike some other stocks -- can be trusted.
In short, even though DUK is near its 52-week high, buying now, or adding to an existing position can still pay off. And with that 4% dividend, holding Duke shares comes without the headaches.