Duke Energy (Duke Energy) Predictability Rank

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What is Duke Energy Predictability Rank?

Warren Buffett said many times that the companies he likes are:

1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.

It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.

GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.

Duke Energy Predictability Rank Calculation

In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.

Our study may be subject to these biases and assumptions:

Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.

The correlation between business predictability and investment returns of a company is showed below.

Correlation Between Business Predictability and Investment Returns

	Predictables	Non-Predictable	All stocks
Total Number of stocks	570	1833	2403
Total Lost Money	61	830	891
Total Lost More Than 50%	18	412	430
Total Lost More Than 90%	4	86	90
Average Gain	260.6%	100.0%	138.1%
Median Gain	150.0%	13.0%	39.0%
Maximum Gain	2852.0%	11483.0%	11483.0%
Maximum Loss	-100.0%	-100.0%	-100.0%
Annualized Average Gain	12.7%	6.7%	8.4%
Annualized Median Gain	8.9%	1.1%	3.1%

For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.

Predictability Rank	5-Star	4.5-Star	4-Star	3.5-Star	3-Star	2.5-Star	2-Star	1-Star (non-predictable)	Average among all
% Out of All 2403 Stocks	3.3%	2.9%	3.7%	3.3%	3.3%	3.7%	3.3%	76.3%	100%
% that are in Loss (10y)	3%	10%	8%	9%	11%	18%	16%	45%	37%
Average Gain (10y)	364.6%	330.9%	278.0%	235.1%	243.5%	227.8%	154.8%	100.0%	138.1%
Median Gain (10y)	238.5%	193.5%	171.0%	159.0%	132.5%	113.5%	87.0%	13.0%	39.0%
Maximum Gainer	2228.0%	2547.0%	2452.0%	2852.0%	2432.0%	1892.0%	1807.0%	11483.0%	11483.0%
Maximum Loser	-82.0%	-53.0%	-67.0%	-100.0%	-83.0%	-100.0%	-78.0%	-100.0%	-100.0%
Annualized Average Gain	15.4%	14.6%	13.2%	12.0%	12.2%	11.7%	9.1%	6.7%	8.4%
Annualized Median Gain	12.1%	10.6%	9.8%	9.3%	8.2%	7.3%	6.0%	1.1%	3.1%

For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank

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Duke Energy (Duke Energy) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Regulated » Duke Energy Corp (NYSE:DUK) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

DUKpA.PFD:USA D2MN:Germany D2MN:Germany D2MN:Germany DUKB34:Brazil

Address

550 South Tryon Street, Charlotte, NC, USA, 28202-1803

Website

https://www.duke-energy.com

Duke Energy is one of the largest U.S. utilities, with regulated utilities in the Carolinas, Indiana, Florida, Ohio, and Kentucky that deliver electricity to 8.2 million customers. Its natural gas utilities serve more than 1.6 million customers. Duke sold its commercial renewable energy portfolio in 2023.

Executives

Kodwo Ghartey-tagoe	officer: EVP & Chief Legal Officer	550 S. TRYON STREET, CHARLOTTE NC 28202
E Marie Mckee	director	DUKE ENERGY CORPORATION, 550 SOUTH TRYON STREET - DEC45A, CHARLOTTE NC 28202
Louis E. Renjel	officer: SVP, External Affairs & Comm	550 S. TRYON STREET, CHARLOTTE NC 28202
Gillespie Thomas Preston Jr.	officer: EVP-Chf Gen Off-Entrp Op Excel	526 S. CHURCH ST., CHARLOTTE NC 28202
Steven K Young	officer: Sr. VP & Controller	DUKE ENERGY CORPORATION, 550 SOUTH TRYON STREET - DEC45A, CHARLOTTE NC 28202
Dhiaa M. Jamil	officer: Grp Exec & Chief Nuclear Offic	DUKE ENERGY CORPORATION, 550 SOUTH TRYON STREET - DEC45A, CHARLOTTE NC 28202
Ronald R Reising	officer: SVP & Chief HR Officer	526 SOUTH CHURCH STREET, EC03T, CHARLOTTE NC 28202
Craver Theodore F Jr	director	DUKE ENERGY CORPORATION, 550 SOUTH TRYON STREET - DEC45A, CHARLOTTE NC 28202
Julia S Janson	officer: Sr. VP & Corporate Secretary	DUKE ENERGY CORPORATION, 550 SOUTH TRYON STREET - DEC45A, CHARLOTTE NC 28202
Robert Alexander Glenn	officer: SVP & CEO DEF & Midwest	550 S. TRYON STREET, CHARLOTTE NC 28202
Derrick Burks	director	C/O EQUITY LIFESTYLE PROPERTIES INC, TWO NORTH RIVERSIDE PLAZA, SUITE 800, CHICAGO IL 60606
Idalene Fay Kesner	director	101 OAKLEY STREET, EVANSVILLE IN 47710
Cynthia S. Lee	officer: VP, Chf Acct Off & Controller	550 S. TRYON STREET, CHARLOTTE NC 28202
Caroline Dorsa	director	BIOGEN INC., 225 BINNEY ST., CAMBRIDGE MA 02142
Michael J. Pacilio	director	550 S. TRYON STREET, CHARLOTTE NC 28202