Ticker Reports for January 21st
Duke vs. NRG: Which Energy Stock Will Power Higher Gains?
Meeting the insatiable demand for energy has been accentuated by the rapid growth of AI data centers. By 2030, it is estimated they will consume 9% of all the electricity generated domestically. This is driving many electric companies to turn to nuclear reactors and various sorts of renewable and clean energy options. Two major players in the utilities sector are Duke Energy Co. (NYSE: DUK) and NRG Inc. (NYSE: NRG). The two electric companies cover over 15 million customers and are spread throughout more than 20 states. The most obvious distinction between the two is that Duke Energy is a regulated utility while NRG is engaged in the competitive deregulated energy markets. For investors, the question is which stock can provide more gains in 2025? Here’s a breakdown of both companies to help you decide.
Duke Energy: A Classic Utility Business Model
When you think of a classic utility company, Duke Energy should come to mind. Its core business is its regulated electric and natural gas utilities. Duke owns and operates power plants, transmission lines, and distribution networks that deliver electricity and natural gas to its 8.2 million customers, primarily in the South. Duke is targeting net-zero methane emissions from its natural gas business by 2030 and net-zero carbon emissions from electricity generation by 2050. The company is relatively low risk with the exception of its exposure to hurricane season in Florida. In fact, Duke expects hurricane restoration costs of up to $2.9 billion for the 2024 hurricane season, which saw devastation from Milton, Debby, and Helene. The company had to restore 5.5 million outages during the historic storm season.
The stock is a dividend aristocrat currently paying a 3.82% annual dividend yield. At the current PE of 20.10, the stock trades at a discount to its 2023 and 2024 PE of around 31.
Flat Q3 2024 Results and Reaffirmed Guidance
Utilities are generally boring stocks generating predictable, stable, and steady revenues. Duke Energy didn’t disappoint in breaking the mold in Q3 2024. The company reported EPS of $1.62, beating consensus analyst estimates by 7 cents. Revenues rose 2.1% year-over-year (YoY) to $8.16 billion, beating the $8.06 billion consensus estimates.
Management reaffirmed guidance for the full year 2024 with EPS between $5.85 to $6.10 versus $5.98 consensus estimates. They also confirmed their long-term adjusted EPS growth rate of 5% to 7% through 2028 and of the 2024 midpoint of $5.98.
Duke Energy CEO Lynn Good commented, “As we look ahead to 2025 and beyond, we have strong momentum driven by our track record of constructive regulatory outcomes, including our recent IRP approvals in the Carolinas, as well as our robust growth in our attractive jurisdictions. These tailwinds give us confidence in our long-term outlook, and we are reaffirming our 5% to 7% EPS growth rate through 2028, up the midpoint of our 2024 range.” Duke Energy stock has gone up 12.84% in the last 12 months.
NRG Energy: Surfing the Deregulated Markets
NRG operates primarily in deregulated electricity markets, where there is competition among energy providers. Regulated markets typically have a single major utility that controls the electricity generation, transmission, and distribution, like Duke Energy. Deregulated markets have market-based pricing determined by supply and demand, as energy suppliers can access existing transmission and distribution infrastructure owned by the utility company.
While consumers can often enjoy lower prices in these markets, anomalies can occur during extreme weather, sending prices to sky-high levels. This was the case during the blizzard of 2021 in Texas when consumers who signed up for wholesale variable rate plans saw their electric bills surge to $5,000 during the weeklong storm.
Volatility Is the Norm: Raising Guidance
NRG Energy reported Q3 2024 EPS of $1.90, missing consensus analyst estimates by 10 cents. Revenue fell 9.1% YoY to $7.22 billion versus a single analyst’s estimate of $9.38 billion.
The company announced a $1.36 billion capital allocation, upping its stock buyback program by $1 billion to $3.7 billion through 2025.
NRG also raised full-year 2024 EPS guidance to $5.95 to $6.75, up from earlier guidance of $5.00 to $6.30, versus $6.36 consensus analyst estimates. NRG stock has gone up 104% in the last 12 months.
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Gold's Momentum Persists: Leading ETF and 2 Stocks to Watch
The price of gold and the SPDR Gold Shares ETF (NYSEARCA: GLD) delivered exceptional returns in 2024, with GLD surging over 30%, outperforming the benchmark and broader market. This trend has continued in 2025, with GLD up nearly 3% year-to-date as of Friday’s close. With gold consolidating near record highs, the question arises: is this a good time to consider exposure for another year of potential outperformance?
Gold’s Ongoing Outperformance
Gold prices rallied on Thursday, reaching a one-month high after weaker-than-expected U.S. economic data drove Treasury yields lower. A soft core inflation reading strengthened expectations of a more dovish Federal Reserve, fueling demand for gold. Gold ended the week in positive territory despite pulling back slightly on Friday. GLD, a popular gold ETF offering exposure without physical commodity holding, is now consolidating in a bullish pattern, sitting just 3.27% below its 52-week high.
Given this setup, which suggests the potential for continued momentum, let’s examine some of the top names within the sector displaying relative strength and key considerations to be aware of before pulling the trigger.
SPDR Gold Shares ETF: A Direct Option
The SPDR Gold Shares ETF is a popular and direct choice for gold exposure, with a net expense ratio of 0.4%. Over the past year, GLD has gained 34%, and recent net inflows of 1.7% reflect increased investor interest.
Technically, GLD is consolidating above key SMAs, with $250 serving as a critical resistance level. A breakout above this level could signal a run toward its all-time high near $258.
GLD’s positioning and track record make it an appealing option for those seeking direct exposure to the commodity.
2 Gold Stocks Displaying Relative Strength
Agnico Eagle Mines Limited (NYSE: AEM) explores and develops gold properties across Canada, Australia, Finland, Mexico, and more. AEM has a market cap of $42.7 billion and a 1.88% dividend yield.
The stock has delivered a stellar return to its shareholders, surging over 70% in the past year and nearly 9% year-to-date. From a technical perspective, the stock's chart is exceptionally bullish, and finding a more attractive chart within the sector has proven challenging. Over the last three months, it has consolidated within a tightening range near its 52-week high, with $86 serving as a key resistance level and potential breakout point.
The stock's technical setup and relative strength position it favorably for further upside momentum, particularly if gold prices continue their upward trajectory. Analysts remain optimistic, assigning the stock a consensus Moderate Buy rating and a price target suggesting nearly 5% additional upside potential.
Kinross Gold Corporation (NYSE: KGC) operates in the U.S., Brazil, Chile, and beyond. The company has a market cap of $12.6 billion, a 1.16% dividend yield, and a P/E ratio of 16.89.
KGC stands out among its larger peers due to its remarkable performance. Year-to-date, the stock has risen over 11% and has soared nearly 90% over the past year. By Friday’s close, KGC was trading above all its key simple moving averages (SMAs) and is now just 4.7% away from its 52-week high, a critical breakout level.
The company's financial performance has also been impressive. In its Q3 2024 earnings report, released on November 5, KGC posted an EPS of $0.24, beating analysts’ consensus estimate of $0.19 by $0.05. Revenue for the quarter surged 29.9% year-over-year, reaching $1.43 billion, which also exceeded expectations of $1.32 billion. Despite being covered by only three analysts, KGC holds a Moderate Buy rating and a consensus price target projecting nearly 8% upside potential.
With its bullish technical setup, strong earnings growth, and favorable analyst sentiment, Kinross Gold continues to be a compelling option for investors seeking exposure to the gold sector.
Key Considerations for Gold Investments
Various factors drive gold's performance, including economic stability, inflation, the strength of the U.S. dollar, and geopolitical tensions. During periods of uncertainty, gold's appeal as a safe haven increases. Additionally, central bank purchases and interest rate movements significantly influence the sector.
Investors in the sector need to stay attuned to these dynamics. With gold prices showing resilience and GLD consolidating near highs, the sector continues to offer opportunities for both momentum traders and long-term investors. However, careful consideration of macroeconomic trends is essential to navigating this complex market effectively.
As gold consolidates and digests its recent record gains, the combination of ETFs like GLD and outperforming stocks like AEM and KGC offers multiple pathways for investors seeking exposure to this historically defensive asset class.
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3 Dividend Stocks Rewarding Investors With Buybacks
For investors seeking income and the potential for long-term growth, dividend-paying stocks coupled with share buyback programs can offer an attractive combination. Dividends provide a regular income stream, while buybacks can enhance shareholder value by reducing the number of outstanding shares and boosting earnings per share (EPS).
Dividends are a portion of a company's profits distributed to shareholders, typically quarterly. They offer a steady income stream, making them appealing to income-oriented investors. Stock buybacks, also known as share repurchases, occur when a company uses its cash reserves to buy back its shares from the open market. This reduces the number of outstanding shares, which can increase existing shareholders' ownership stake and potentially drive up the stock price.
Citigroup: A Financial Giant’s Commitment to Shareholders
Citigroup (NYSE: C) is a global financial services giant that offers a diverse range of financial products and services to consumers, corporations, governments, and institutions worldwide. With its extensive reach and established market position, Citigroup has a history of rewarding shareholders through various methods.
The Citigroup Board of Directors recently declared a quarterly dividend of $0.56 per share on common stock. The dividend is payable on February 28, 2025, to shareholders of record on February 3, 2025. Citigroup's current dividend yield is approximately 2.85%.
Citigroup's commitment to shareholder returns is further underscored by its recently announced $20 billion common stock repurchase program, commencing in the first quarter of 2025. This significant buyback plan followed a strong fourth-quarter earnings report, contributing to positive investor sentiment. Citigroup’s earnings report for the fourth quarter of 2024 revealed a net income of $2.9 billion, an increase compared to the prior year, translating to $1.34 per diluted share. Revenues for the quarter reached $19.6 billion, representing a 12% increase from the same period in 2023. Full-year 2024 results were equally impressive, with net income reaching $12.7 billion on total revenues of $81.1 billion. Net income increased nearly 40% compared to 2023, and full-year revenues demonstrated healthy year-over-year growth of 3%. These figures indicate strong financial performance and a clear commitment to maximizing shareholder value.
ExxonMobil's 2030 Plan: A Blueprint for Long-Term Value
ExxonMobil (NYSE: XOM) explores, produces, refines, and markets oil and natural gas. Its current dividend yield is an attractive 3.57%. ExxonMobil recently increased its quarterly dividend by 4% to $0.99 per share, representing 42 consecutive years of annual dividend increases. This highlights the company's commitment to shareholder returns.
ExxonMobil’s commitment to shareholder value extends beyond dividends. The company has ambitious share repurchase plans, targeting $20 billion in buybacks for 2025 and an additional $20 billion for 2026. This substantial capital return strategy is integral to ExxonMobil's overall approach to rewarding investors.
ExxonMobil is investing in Guyana to increase production capacity, develop LNG projects to increase sales and expand advanced recycling capacity. Additionally, they have a lithium carbonate offtake agreement with LG Chem. These initiatives are projected to grow earnings potential by $20 billion and cash flow by $30 billion by 2030.
ExxonMobil's Q3 2024 earnings report reveals outstanding results, with earnings reaching $8.6 billion, equating to $1.92 per share. The company achieved a record-high liquids production of 3.2 million barrels per day, showcasing the success of its operational efficiency and growth strategy. While year-to-date 2024 earnings of $26.1 billion are lower than the previous year's $28.4 billion due to reduced refining margins and natural gas prices, ExxonMobil's advantaged volume growth from Guyana and Permian assets effectively offset this decline.
Bank of America: Buybacks, Dividends, and a Digital Transformation
Bank of America (NYSE: BAC) provides a comprehensive array of banking, investment, and financial services to a vast customer base. The company recently increased its dividend yield, which now stands at 2.24%. This highlights the company's dedication to providing returns to its shareholders. This commitment is further solidified by Bank of America's strategic decision to authorize a significant $25 billion share repurchase program in August 2024, replacing the previous program that concluded at the end of fiscal year 2024. This substantial investment highlights the company’s focus on returning value to its shareholders.
Bank of America’s earnings report for the fourth quarter of 2024 (Q4 2024) shows a clear trend of growth and profitability, with results that show a healthy increase in net income to $6.7 billion. Earnings per share reached $0.82. This strong performance is further reflected in the full-year 2024 results, with net income exceeding $27.1 billion on revenues exceeding $100 billion, showcasing healthy year-over-year growth of 3% in revenue and nearly 40% in net income. Bank of America also returned a significant $5.5 billion to shareholders in Q4 2024, comprised of $2 billion in dividends and $3.5 billion in share repurchases. This substantial capital return is further evidence of the company’s dedication to shareholder value.
Bank of America is also actively investing in its digital capabilities. Through strategic technology investments, the company is focusing on improving customer service and expanding its digital footprint. This strategic shift towards digital banking enhances operational efficiencies and provides customers with enhanced convenience and accessibility. These financial results, coupled with Bank of America’s robust capital return strategy and strategic emphasis on innovation, clearly position the company as a leader in the financial sector and affirm its commitment to delivering significant returns to shareholders.
A Strategic Blend: Dividends and Buybacks
These three companies offer investors a compelling combination of dividend income and share buyback programs, highlighting their commitment to enhancing shareholder value. Dividends provide a consistent income stream, appealing to those seeking regular returns, while buybacks can bolster earnings per share and drive stock price appreciation. Together, these strategies offer a powerful combination for investors seeking both income and growth potential. These companies' strategic initiatives, financial performance, and dedication to returning capital to shareholders suggest a promising outlook for long-term investors.
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