Analyzing Utilities’ Valuation and Dividend Yields

The biggest regulated utility, Duke Energy (DUK), is currently trading at a PE multiple of 19x and an EV-to-EBITDA multiple of 10.7x, while Southern’s (SO) EV-to-EBITDA multiple is ~10.4x. Southern’s five-year historical average is ~11.0x. NextEra Energy (NEE) is trading at a PE multiple of ~13x, lower than its five-year historical average. Meanwhile, NextEra Energy’s EV-to-EBITDA multiple, 15.4x, is higher than its five-year historical average of ~11.0x.