7 Most Undervalued Utility Stocks To Buy According To Analysts

3. Duke Energy (NYSE:DUK)

Upside Potential: 8.90%

Forward P/E Ratio as of October 7: 19.08  

Number of Hedge Fund Investors: 37   

Duke Energy (NYSE:DUK) is a major electric utility holding company based in the United States. The company serves 8.2 million customers and collectively owns 50,000 megawatts of energy capacity. Duke Energy’s (NYSE:DUK) natural gas unit services 1.6 million customers in North Carolina, South Carolina, Tennessee, Ohio and Kentucky.

Duke Energy (NYSE:DUK) is rapidly expanding its renewable portfolio, with a goal of deploying 30 GW of regulated renewable power generation by 2035. The company’s solar business is the largest component of its renewable energy mix. The company has over 6,000 MW of renewable energy capacity through more than 260 power purchase agreements and owns 430 MW of renewable generation, including 13 solar generation plants that generate up to 153 MW. Additionally, Duke Energy (NYSE:DUK) is investing heavily in battery energy storage systems.

Duke Energy’s (NYSE:DUK) valuation is competitive, the stock is trading 19.08 times this year’s earnings estimate. The company is expected to achieve 7.27% earnings growth this year. With a consensus Buy rating from industry analysts, the stock has a target price of $120.98, which represents an 8.90% upside potential from its current level.

Duke Energy’s (NYSE:DUK) geographic diversity, favorable regulatory oversight, and reasonable growth make it an attractive investment opportunity. As of the second quarter, 37 hedge funds have invested a total of $774.16 million in the company. According to Insider Monkey, GQG Partners holds the largest stake in the company, with $260.56 million worth of shares as of June 30.