DUKDuke Energy Corporation (Holding Company)

Duke Energy is the regulated utility of the Carolinas and Florida, living on tariffs rather than market prices.

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.