Monday, July 4, 2011

Dividend Machine Duke Energy, symbol DUK for week of July 4, 2011

                Another widows and orphans stocks is our dividend machine profile for the week of Monday July 4, 2011; Duke Energy symbol DUK is an outstanding utility stock.

                I have profiled several utility stocks over the past 33 weeks and Duke Energy is one of the best.  Fundamentally, this company operates with less debt than most utilities.  DUK sports a D/E (debt to equity) ratio of .82.   Duke closed trading on July 1, 2011 at $19.07 per share.  Do you know that if you dismantled DUK and sold off all the assets the amount of money raised would be about $17.08.  That value is called book value.  It is pretty impressive to pay only $19.07 for a book value of $17.08.  A high book value is an additional indicator of fundamental strength.

Duke is not going to provide call option income.  It is not a volatile stock.  Therefore, we expect an income greater than the 3% threshold for dividend machines.    DUK has nice growth and that growth has been reflected in an ever-increasing dividend.  DUK has been a cash machine for those seeking income.  Not only has DUK provided a dividend yield at or greater than 5%; currently yielding 5.24%; DUK has provided special additional dividends.  DUK shares almost all of its $1.04 per share earnings with its owners.

You know that interest rates have increased lately.  You can buy a 10-year U.S.  Treasury bond with a yield greater than 3%.  This means our dividend machines need to produce more income than a U.S. treasury and therefore more than the typical 3% we use as a minimal yield threshold.  DUK meets this criterion.

If you own DUK by August 10, 2011, you will receive the quarterly dividend of $.25 per share on September 16, 2011.  Consider DUK for the income-producing portion of your investments.

Very Truly Yours,
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