NextEra Energy vs. Duke Energy: Which Utility Stock Shines Brighter?
May 29, 2025
The Zacks Utility -Electric Power industry provides a strong case for stable, long-term income, supported by its regulated structure. These regulations allow utilities to recover costs and earn consistent returns, reducing earnings volatility. With steady electricity demand across economic cycles and attractive dividend yields, the industry serves as a reliable, defensive option for income-focused investors.
The U.S. electric utilities industry is evolving beyond its traditional income role, driven by the shift toward clean energy. Significant investments in grid modernization, renewable integration, and electrification — supported by federal incentives and climate policies — are reshaping the sector. Utilities leading this transition are well-positioned for long-term growth, offering investors a lower-risk way to tap into the broader green energy movement.
NextEra Energy
NEE and
Duke Energy
DUK are prominent U.S. electric utilities actively investing in renewable energy, making them pivotal players in the shift toward cleaner power generation.
NextEra Energy is a top U.S. utility known for its leadership in renewable energy and sustainable growth. Through major investments in wind, solar, battery storage, and grid modernization, NEE is driving the clean energy transition. As the parent company of Florida Power & Light and NextEra Energy Resources, it operates one of the largest portfolios of wind and solar projects in the world. Backed by strong financials and a track record of innovation, it offers investors a blend of stability and long-term growth tied to the green energy movement.
Duke Energy, one of the largest U.S. utilities, is making significant strides in the clean energy transition. It aims to cut carbon emissions by 50% by 2030 and reach net-zero by 2050, with plans to double renewable capacity by 2030 and phase out coal by 2035. Backed by investment in modern infrastructure and clean technologies, Duke offers investors stable, regulated returns with long-term sustainable growth potential.
Both NextEra Energy and Duke Energy are leading players in the utility sector. Let’s take a closer look at their fundamentals to compare and identify which stock presents a more attractive investment opportunity for investors.
NEE & DUK’s Earnings Growth Projections
The Zacks Consensus Estimate for NextEra Energy’s earnings per share in 2025 moves up 0.27% in the past 60 days, and 2026 estimates remained unchanged in the same time frame. Long-term (three to five years) earnings growth per share is pegged at 7.72%.
NEE's Earnings Estimates
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Duke Energy’s earnings per share in 2025 remained the same in the past 60 days, and the 2026 estimates dropped 0.15% in the same time frame. Long-term earnings growth per share is pegged at 6.33%.
DUK's Earnings Estimates
Image Source: Zacks Investment Research
NEE & DUK’s Dividend Yield
Dividends are regular payments made by a company to its shareholders and represent a direct way for investors to earn a return on their investment. They are an important indicator of a company’s financial health and stability, often signaling strong cash flow and consistent earnings. Utilities are known for regular dividend payments to its shareholders.
Currently, the dividend yield for NextEra Energy is 3.33%, while the same for Duke Energy is 3.59%. The dividend yields of both companies are higher than their industry’s yield of 3.17%.
Return on Equity (ROE)
ROE is an essential financial indicator that evaluates a company’s efficiency in generating profits from the equity invested by its shareholders. It demonstrates how well management is utilizing the capital provided to increase earnings and deliver value. NEE’s current ROE is 12.06% compared with DUK’s ROE of 9.88%. NEE outperforms the industry’s ROE of 10.13%.
Debt to Capital
The Zacks Utilities sector is a capital-intensive one, and huge investments are required at regular intervals to upgrade, maintain and expand operations. The usage of new evolving technology also requires investments. So, the utilities borrow from the market and add it to their internal cash generation to fund their long-term investments.
NextEra Energy’s debt-to-capital currently stands at 56.98% compared with Duke Energy’s debt-to-capital of 60.61%. Both companies are using higher debt to fund their business, as the industry’s debt-to-capital stands at 54.57%.
Valuation
NextEra Energy currently appears to be a tad cheaper compared with Duke Energy on a Price/Earnings Forward 12-month basis. (P/E- F12M).
NEE is currently trading at 17.93X, while DUK is trading at 17.96X compared with their industry’s 15.37X.
Long-Term Capital Expenditure Plans
Capital expenditure is critical in the sector, as it drives infrastructure development, system reliability, and long-term growth. Utilities must consistently invest in power generation, transmission, and distribution networks to meet rising demand, integrate renewable energy sources, and comply with evolving regulatory standards.
NextEra Energy plans to invest nearly $72.6 billion in the 2025-2029 period to strengthen its infrastructure and add more clean electricity generation assets. Duke Energy plans to invest $46.6 billion in the 2025-2027 period to strengthen its electric transmission, distribution and generation infrastructure. Both companies have strong capital investment plans, and the decline in interest rates will lower the capital servicing expenses and be beneficial to both companies.
Conclusion
NextEra Energy and Duke Energy are investing heavily in their infrastructure to serve millions of customers across the United States.
Based on the above discussion, NextEra Energy currently has a marginal edge over Duke Energy, despite the stocks carrying a Zacks Rank #3 (Hold) each. NEE’s positive movement in earnings estimates in 2025, better ROE, and cheaper valuation make it a better choice in the utility space.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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