Income is a big part of investors' returns. Stocks, mutual funds and fixed income ideas in this column are featured because they are relatively solid in their ability to pay dividends or interest. We're giving income investors a resource to start their research for investments that give better yields with lower risk.

September 1, 2010 - Duke Energy Corp. (DUK-NYSE) operates as an energy company in the Americas. It has three segments: U.S. Franchised Electric and Gas, Commercial Power, and International Energy.

The Commercial Power segment offers onsite energy solutions and utility services. This division owns, operates, and manages power plants, and engages in the wholesale marketing and procurement of electric power, fuel, and emission allowances related to plants. It also develops and implements customized energy solutions.

The company's International Energy segment operates and manages power generation facilities, and sells and markets electric power and natural gas outside the United States. This segment serves retail distributors, electric utilities, independent power producers, marketers, and industrial/commercial companies.

It also develops, owns, and operates a fiber optic communications network, primarily in the Southeast U.S, serving wireless, local, and long-distance communications companies, as well as Internet service providers, and other businesses and organizations. The company was founded in 1916 and is based in Charlotte, North Carolina.

This company was featured about a year ago when the price was $15.70. If you had bought it then, you would have had a gain of 11% on the stock price and a dividend yield of 6.1% to tack on for a total return of 17.1% (with no commission figured in) for the year. Not bad in a market that is trying its very best to show some gain in the same time period. So, can this kind of reward continue?

Duke has been applying for and receiving eletric rate increases in North and South Carolina and a gas hike in Kentucky. Higher prices along with higher demand, thanks to a little better economy and a hotter summer, are more reasons for an expected increase in earnings this year. 22 analysts see this year's total at $1.33, up from $1.22 last year. Next year, they forecast $1.34. Quarterly results will be out in October. Look for 40 cents a share, the same as last year in the third period. For the fourth quarter, estimates are for 26 cents a share compared to 28 cents last year in the fourth.

Duke is undertaking a $1.37 billion gas-fired capacity plant for the Carolinas. That should generate 1,240 megawatts that will be available in late 2011 and 2012. Another add-on: a $2.4 billion, 825 megawatt coal-fired plant to also serve the Carolinas. That will be up and running in 2012. Another project is running over budget. The one in Indiana. Originally estimated at $2.35 billion, it looks like the finished 618 mw coal gasification plant will cost closer to $2.88 billion. The company has requested regulators to approve the higher budget so it can recover all the costs through higher rates when the facility is completed in 2012.

For all the success in the Carolinas, there's one state that's been difficult: Ohio. Duke bought Cinergy, an Ohio utility, in 2006. It was the company's first foray into the state, a state that allows customers to choose their power supplier. In 2009, enough customers chose other suppliers that they cost Duke 2 cents a share. Analysts think there will be another 5 cents a share less this year.

Another issue: in the June quarter of this year, the company took a noncash charge of 46 cents a share for a write down of goodwill and other assets associated with nonregulated plants in the Midwest.

More numbers: Market Cap is $23 billion. Trailing P/E is 15 while Forward P/E is 13. Price to book is 1.07. Book value is $16.03. Operating margin was 22.76% in thw last 52 weeks while Profit margin was 5.17%. Return on equity was 3.15% and Return on assets was 3.36%. Total cash is $1.01 billion for 77 cents a share. Total debt is $17.81 billion. Current ratio is 1.42. Beta is .47. There are 1.32 billion shares outstanding. Institutions own 50.50%.

Duke is a strong utility with a growing population in the Carolinas. It is expanding facilities to meet demand with a regulatory agency that seems to understand the company's needs. Ohio is a problem and a drag on earnings at the moment. Income investors will like the yield here but may wonder if there's a lot of capital appreciation left. If the economy picks up and the weather is normal, there seems to be a good chance the price will improve over the next year.

- Company Web site: www.duke-energy.com