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The Zacks Utility Electric - Power industry is undergoing a significant transformation, driven by the increasing demand for electricity due to data center expansion, electrification of transportation, and grid modernization initiatives. Utilities are investing heavily in infrastructure to enhance grid resilience, strengthen transmission and distribution lines, integrate renewable energy sources, and meet regulatory requirements. This sector is characterized by stable cash flows, consistent returns, payment of regular dividends and substantial capital expenditures aimed at long-term growth and sustainability. Two prominent companies in the utility space are PPL Corporation PPL and Duke Energy Corporation DUK.
PPL is strategically positioned to capitalize on the increasing electricity demand across its service territories. The company will invest $20 billion from 2025 to 2028 to strengthen its infrastructure. This investment focuses on grid hardening and accommodating increased electrification. Investments will also focus on new technology and support increasing demand from data centers.
Duke Energy is expanding its infrastructure to meet the surging power demand in its service areas due to the development of data centers and customer growth. The company expects to spend $83 billion during the 2025-2029 period, allocating the funds toward grid modernization and the transition to low-carbon energy sources.
Per the latest release of the U.S. Energy Information Administration, demand for electricity is rising in the United States, and a clear transition toward clean energy sources is evident in the Utilities space. Amid such an industry backdrop, let’s delve deep and closely look at the fundamentals of these stocks.
PPL & DUK’s Earnings Growth Prospects
The Zacks Consensus Estimate for PPL’s 2025 and 2026 earnings reflect year-over-year growth of 7.69% and 8.24%, respectively. Long-term (three to five years) earnings growth per share is pegged at 7.46%.
PPL Earnings Estimates
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for DUK’s 2025 and 2026 earnings reflect year-over-year growth of 7.12% and 6.24%, respectively. Long-term (three to five years) earnings growth per share is pegged at 6.33%.
DUK Earnings Estimates
Image Source: Zacks Investment Research
Return on Equity (ROE)
ROE measures how efficiently the company is utilizing its shareholders’ funds to generate profits. PPL’s current ROE is 8.88% compared with DUK’s ROE of 9.50%. ROE of both companies is a bit lower than their industry’s ROE of 9.77%.