Duke Energy: Newly Issued Equity Units Are An Interesting Option

The Investment Doctor Investing Group Leader Follow Summary Duke Energy offers a compelling growth profile, investing heavily in its network despite trading at 18x this year’s earnings. DUK’s recently issued 2029 equity units (DUKU) provide higher yield via a 2.90% contract adjustment, totaling $3.875 per unit annually until conversion. DUKU units convert to common shares in August 2029, with conversion ratios exposing holders to potential capital gains or losses based on share price. These hybrid securities suit investors seeking future DUK equity exposure with enhanced interim yield but carry tax and conversion risks to consider. Looking for more investing ideas like this one? Get them exclusively at European Small-Cap Ideas. Learn More » ArLawKa AungTun/iStock via Getty Images Introduction I have been keeping an eye on Duke Energy ( DUK ) for quite some time now, not because I'm happy to pay 18 times this year's earnings, but because the utilities company has an interesting growth profile as This article was written by The Investment Doctor 24K Followers Follow The Investment Doctor is a financial writer, highlighting European small-caps with a 5-7 year investment horizon. He strongly believes a portfolio should consist of a mixture of dividend and growth stocks. He is the leader of the investment group European Small Cap Ideas which offers exclusive access to actionable research on appealing Europe-focused investment opportunities not found elsewhere. The a focus is on high-quality ideas in the small-cap space, with emphasis on capital gains and dividend income for continuous cash flow. Features include: two model portfolios - the European Small Cap Ideas portfolio and the European REIT Portfolio, weekly updates, educational content to learn more about the European investing opportunities, and an active chat room to discuss the latest developments of the portfolio holdings. Learn more. Analyst’s Disclosure: I/we have a beneficial long position in the shares of DUKB either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. I may buy DUKU, but this is unlikely to happen within the next 72 hours Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.