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,
TheMoneyMadam
