Berko: Duke Energy a comfortable investment
By Malcolm Berko Taking Stock August 22, 2013 8:30PM
Updated: September 24, 2013 6:40AM
Dear Mr. Berko: I have too much money sitting in my money market account. It earns practically nothing. I need more income. I have about $80,000 that I’d like to get more income on. What is your opinion of the Duke Energy money market mutual fund, which advertises a yield of 1.41 percent?
HA, Port Charlotte, Fla.
Dear HA: The first thing you should know is Duke Energy Corp. (DUK-$66.33) may be the largest electric utility in the nation. DUK’s revenue growth should compound at 3 percent, to $29.3 billion, by 2018, and earnings could improve by about 5 percent annually, from the current $4.05 a share to $5. And in the coming four years, the $3.09 dividend, yielding 4.7 percent, could rise to $3.35.
I’d be comfortable putting $80,000 into DUK’s money market fund.
But before you invest, call DUK for an investors kit, using the phone number in the advertisement. This kit will tell you that interest is compounded daily and credited monthly. It also will tell you that the minimum investment is $1,000 and that the maximum investment per person is $1 million. And if your balance falls below $1,000, DUK will liquidate the account and post you a check, less any applicable withholding.
As I said, the account pays a competitive floating rate. It is determined on a weekly basis, and all rate changes become effective on the following Monday.
Address questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email email@example.com.