Duke Energy Corporation (Holding Company) (DUK)

The mechanics are those of all regulated utilities: the state commission allows investment into the rate base and an established return on it. Profit growth is therefore planned as a volume of investment rather than market luck, and the stock behaves closer to a bond than to an equity.

The investment programme is large: replacing coal generation with gas and renewables, hardening networks against hurricanes, connecting new customers. The service territories are growing quickly in population, which is rare for a utility.

Rate sensitivity is twofold: expensive money raises the cost of financing capital programmes and makes the dividend yield less attractive against bonds. Duke pays a high dividend with a long payment history.