What is transmission versus distribution in the electric grid?

The electric grid has three layers: generation (power plants producing electricity); transmission (high-voltage power lines, typically 138kV-765kV, carrying electricity long distances from generation to population centers); and distribution (lower-voltage lines, typically 4kV-69kV, delivering electricity from transmission substations to homes and businesses). Transmission is regulated by FERC (federal) because power flows across state lines; distribution is regulated by state PUCs. AEP operates one of the nation's largest transmission networks — 40,000+ miles of high-voltage lines connecting power plants to regional load centers. Transmission investment earns FERC-approved regulated returns, which are often more timely and predictable than state-regulated distribution returns. As the U.S. builds renewable energy in remote areas (wind in Wyoming, solar in the Southwest), new transmission lines are needed to move this power to population centers — creating a major multi-decade transmission investment opportunity that benefits AEP's large transmission infrastructure position.

What is nuclear power's role in Duke Energy's generation mix?

Duke Energy operates 11 nuclear reactors at 6 nuclear power plants across the Carolinas (Brunswick, Harris, McGuire, Catawba, Oconee) and the Midwest (Beaver Valley under co-ownership). Nuclear provides approximately 40% of Duke's electricity generation — more than any other single generation type. Nuclear's role is as baseload generation: nuclear plants run continuously (24/7, 90%+ capacity factor) producing predictable, consistent electricity regardless of weather. Unlike wind and solar (intermittent), nuclear provides 'always on' generation. Nuclear's carbon-free generation helps Duke meet clean energy commitments — nuclear plants don't emit CO2. Nuclear's disadvantages are: high capital cost to build (new nuclear construction costs $10,000+ per kilowatt vs. $1,000-1,500/kW for solar); long construction times; radioactive waste management requirements; and political sensitivity. Duke's existing nuclear fleet is fully depreciated and generates low-cost electricity; extending license lifetimes (from 60 to 80 years) is Duke's strategy rather than building new nuclear.

What is coal retirement and why are utilities replacing coal with different technologies?

Coal-fired power plants have been the backbone of U.S. electricity generation for over a century but are rapidly being retired due to: environmental regulations (EPA Mercury and Air Toxics Standards, Clean Power Plan successors) requiring expensive emission controls that often aren't economical for aging plants; competition from cheap natural gas (since the shale revolution reduced gas prices dramatically) and increasingly cheap wind and solar; carbon emission reduction commitments by utilities and states; and the age of many coal plants (50-70 years old, approaching or past their useful life). When Duke, AEP, or other utilities retire a coal plant, they must replace the generation with new resources: natural gas combined cycle plants provide flexible, dispatchable generation; solar farms provide low-cost clean daytime generation; battery storage provides peak shaving and frequency regulation; and offshore or onshore wind provides carbon-free energy. Each replacement unit requires capital investment that utilities seek to include in their rate base for regulated return recovery, driving the utility's rate base growth and earnings expansion.

brimindinvest.com / compare / duk-vs-aepLIVE

DUK

Duke Energy Corporation · Utilities - Electric

$123.86

-0.56% this month

VERSUS

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AEP

American Electric Power Company, Inc. · Utilities - Electric

$127.69

-0.95% this month

Scoreboard verdict

Across AI score, momentum, valuation, upside, operating margin

DUK

2

AEP

3

AEP LEADS 3/5

Comparison scoreboard

AEP LEADS 3/5

AI Score

DUK 41.2

AEP ✓51.0

1Y Return

DUK +7.90%

AEP ✓+25.65%

Fwd P/E

DUK ✓17.28

AEP 18.62

Target Up.

DUK +11.28%

AEP ✓+12.85%

Op. Margin

DUK ✓25.51%

AEP 23.74%

Metrics last refreshed: 6/22/2026

Quick take

DUK vs AEP Stock Comparison: AI Score, Valuation, Performance and Upside

DUK (Duke Energy) and AEP (American Electric Power) are both large regulated U.S. electric utilities serving millions of customers in the Southeast and Midwest — Duke is the largest U.S. utility by customer count with significant nuclear generation and a Southeast/Florida geographic focus, while AEP operates the largest transmission network in the U.S. spanning 11 Midwestern and Southern states with significant industrial customer load and major transmission investment opportunity.

DUK vs AEP is largest regulated utility managing Southeast clean energy transition (Duke's massive customer base in the Carolinas and Florida with nuclear generation and offshore wind investment transitioning from coal to clean energy) versus largest transmission network utility with industrial load growth (AEP's 40,000+ miles of transmission infrastructure serving 11 states with growing industrial and data center electricity demand driving investment opportunity) — scale and Southeast versus transmission infrastructure and industrial.

Live analysis · updated 6/22/2026

AEP holds the edge across 3 of 5 key metrics in this comparison. AEP has delivered stronger 1-year price return (+25.65% vs +7.90%), though DUK trades at the lower forward P/E (17.28x vs 18.62x). DUK leads on both revenue growth (11.30%) and operating margin (25.51%), suggesting a stronger fundamental setup on both dimensions. Analyst consensus implies similar upside for both: +11.28% for DUK and +12.85% for AEP.

Normalized 1Y performance

DUK

AEP

Recent returns

DUK

AEP

Analyst price targets & sentiment

DUK

Price target range

analyst mean$137.83
current price$123.86

+11.3% upside to analyst mean

AEP

Price target range

analyst mean$144.10
current price$127.69

+12.8% upside to analyst mean

Who should consider this stock?

DUK may suit investors who:

→Want the largest regulated electric utility with broad customer diversification across Southeast and Midwest states and nuclear clean energy generation providing baseload carbon-free power
→Value Duke's Florida utility exposure to that state's population growth as a long-term customer growth driver alongside Carolina industrial development
→Prefer Duke's consistent 5-7% earnings growth guidance and dividend growth track record as a core regulated utility income holding

AEP may suit investors who:

→Want the largest U.S. transmission network as a long-term infrastructure investment earning FERC-regulated returns on transmission investment supporting renewable energy interconnection and grid modernization
→Value AEP's industrial customer load growth from manufacturing reshoring and electrification as a structural electricity demand driver supplementing residential growth
→See AEP's multi-state regulatory diversification across 11 states as spreading regulatory risk versus utilities concentrated in fewer jurisdictions

Performance & AI score

Metric	DUK	AEP
AI score	41.2	51.0
AI rank	#969	#405
Latest close	$123.86	$127.69
1M return	-0.56%	-0.95%
6M return	+5.48%	+11.32%
1Y return	+7.90%	+25.65%

$10,000 invested — hypothetical growth (dividends reinvested)

How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?

Period	DUK	AEP
1Y ago	$10.81K (+8.1%) started 2025-06-18	$12.62K (+26.2%) started 2025-06-18
5Y ago	$17K (+70.0%) started 2021-06-21	$20.91K (+109.1%) started 2021-06-21
10Y ago	$34.33K (+243.3%) started 2016-06-20	$38.25K (+282.5%) started 2016-06-20

Hypothetical — past performance does not guarantee future results.

Valuation & upside potential

Metric	DUK	AEP
Market cap	$96.56B	$69.48B
Trailing P/E	19.06	18.92
Forward P/E	17.28	18.62
Price/Sales	N/A	N/A
EV/Revenue	5.76	5.44
Analyst target	$137.83	$144.10
Target upside	+11.28%	+12.85%

Growth, profitability & risk

Metric	DUK	AEP
Revenue growth	11.30%	10.20%
Earnings growth	12.00%	6.70%
EPS growth	+12.00%	+6.70%
FCF margin	-6.87%	-31.00%
Operating margin	25.51%	23.74%
Profit margin	15.71%	16.29%
ROIC proxy	9.66%	12.58%
Return on equity	9.66%	12.58%
Dividend yield	3.44%	2.98%
Beta	0.38	0.52
Debt/equity	161.50	157.10
Current ratio	0.66	0.53
Quick ratio	0.30	0.29

Drawdown & downside risk

Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.

1Y risk snapshot

DUK max drawdown11.65%

AEP max drawdown9.74%

DUK max wkly drop5.99%

AEP max wkly drop5.95%

5Y risk snapshot

DUK max drawdown24.16%

AEP max drawdown29.56%

DUK max wkly drop10.31%

AEP max wkly drop11.71%

10Y risk snapshot

DUK max drawdown37.37%

AEP max drawdown32.91%

DUK max wkly drop20.25%

AEP max wkly drop21.00%

Performance metrics by period

Period	Metric	DUK	AEP
1Y	Growth	+8.10%	+26.18%
	CAGR	+8.11%	+26.22%
	Sharpe ratio	0.30	1.12
	Max drawdown	11.65%	9.74%
	Max daily drop	2.70%	3.27%
	Max wkly drop	5.99%	5.95%
5Y	Growth	+43.30%	+78.23%
	CAGR	+7.47%	+12.27%
	Sharpe ratio	0.24	0.46
	Max drawdown	24.16%	29.56%
	Max daily drop	4.70%	5.34%
	Max wkly drop	10.31%	11.71%
10Y	Growth	+119.32%	+163.20%
	CAGR	+8.17%	+10.17%
	Sharpe ratio	0.27	0.35
	Max drawdown	37.37%	32.91%
	Max daily drop	11.50%	11.58%
	Max wkly drop	20.25%	21.00%

Business comparison

Category	DUK	AEP
Company	Duke Energy Corporation	American Electric Power Company, Inc.
Sector	Utilities	Utilities
Industry	N/A	N/A
Core business	Duke Energy is the largest U.S. regulated electric utility by customer count — serving approximately 8.2 million electric customers in the Carolinas, Florida, Indiana, Ohio, and Kentucky. Duke's generation fleet transitions from coal toward natural gas, nuclear, solar, and offshore wind (Atlantic Shores in New Jersey and Santee Cooper SC wind). Duke also operates a gas distribution and generation business and has been selling non-core assets to focus on regulated utility operations.	American Electric Power is one of the largest U.S. electric utilities — serving approximately 5.6 million electric customers in 11 states (Ohio, Texas, Michigan, Indiana, Kentucky, Virginia, West Virginia, Tennessee, Arkansas, Louisiana, Oklahoma). AEP operates one of the largest transmission networks in the country, delivering power across the Midwest and South. AEP's customer base includes significant industrial load (steel mills, chemical plants, oil refineries) in addition to residential and commercial customers.
Investor focus	Investors track Duke's regulated earnings growth (capital investment in grid modernization, new generation, and distribution), North Carolina and South Carolina rate case outcomes (regulatory approval of capital cost recovery), coal plant retirement and replacement capital, and Duke's 5-7% annual earnings growth guidance.	Investors track AEP's regulated utility earnings growth, transmission investment opportunity (AEP's large transmission network benefits from grid modernization and renewable interconnection), industrial load growth (particularly data centers and industrial electrification), and coal retirement capital program.

DUK strengths

→Largest regulated electric utility customer count in the U.S. creates scale advantages — Duke's 8.2 million customers provide a large rate base over which to earn regulated returns, and capital investments spread over more customers reduce individual rate impact
→Constructive regulatory relationships in Carolinas and Florida — Duke has generally favorable regulatory relationships in its core states; constructive rate cases allow timely recovery of capital investments in grid modernization and clean energy transition
→Nuclear generation provides clean baseload power in Southeast — Duke's 11 nuclear units provide large amounts of 24/7 carbon-free generation that supports clean energy commitments while avoiding the weather dependency of wind and solar

AEP strengths

→Largest transmission network in the U.S. creates unique infrastructure position — AEP's 40,000+ miles of high-voltage transmission lines are critical infrastructure for moving electricity across the Midwest; transmission investment earns regulated returns approved by FERC and is a growing capital opportunity as renewable energy requires new transmission
→Industrial customer load growth from manufacturing reshoring and electrification — AEP's industrial customer base (steel, chemicals, oil refining) is benefiting from domestic manufacturing investment (Inflation Reduction Act incentives) and industrial electrification demand growth
→Regulated utility geography diversified across 11 states — AEP's multi-state operations diversify regulatory risk; unfavorable outcomes in one state's rate case are offset by constructive outcomes in others

Risks to watch — DUK

→Coal retirement capital costs and replacement generation investment — Duke has hundreds of gigawatts of coal capacity to retire over the next decade; each retirement requires replacement generation investment (natural gas peakers, solar, battery storage) that must be approved by regulators
→Rate case outcomes and customer affordability — large capital programs (renewable transition, grid hardening) require rate increases; regulators must balance utility investment recovery with customer affordability constraints
→Extreme weather grid resilience requirements — Duke's territory in the Carolinas and Florida experiences hurricanes; post-hurricane grid restoration costs and capital investments for grid hardening are significant and recurring

Risks to watch — AEP

→Texas ERCOT exposure through AEP Texas — AEP Texas operates distribution in Texas but is NOT an integrated ERCOT utility; it distributes ERCOT power to West Texas customers; ERCOT market dynamics (extreme weather events, market price volatility) do affect ERCOT distribution operations
→Coal retirement and replacement in Ohio and Kentucky — AEP's Midwestern states (Ohio, Kentucky) have significant coal generation to retire; replacement capital investment faces regulatory scrutiny in states where coal retirement has political sensitivity
→Load growth timing — while data center and industrial electrification demand is real, the timing of large load additions and associated transmission/distribution infrastructure investment can be lumpy and create earnings estimate volatility

Frequently asked questions

Electric utilities in the U.S. are regulated monopolies — customers cannot choose their electricity provider; a single utility has an exclusive franchise to serve a geographic territory. Because utilities have no competition, state public utility commissions (PUCs) regulate their rates to protect customers from monopoly pricing. The regulatory model works as follows: the utility files a rate case (application to change electricity rates); regulators review the utility's prudently incurred costs and capital investments; regulators set an allowed return on equity (ROE) on the utility's rate base (regulatory asset value); and rates are set to allow the utility to recover costs and earn the allowed ROE. For utility investors, regulatory outcomes are critical: an allowed ROE of 10% generates higher earnings than 9%; approval of the utility's capital investments to rate base determines how much the utility can earn; and the speed of rate case approvals affects cash flow timing. 'Constructive' regulatory environments that approve capital costs promptly and allow adequate ROEs are strongly preferred by utility investors.

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