Key Takeaways
- Duke Energy reported third-quarter adjusted EPS of $1.99 on Nov. 5, up from $1.81 a year ago, and Chevron’s third-quarter free cash flow rose to $12.0 billion from $4.9 billion.
- Duke yields 3.5% and Chevron 3.2%, but Chevron grew its dividend 6% a year from fiscal 2020 to fiscal 2025, against 2% for Duke.
- Both dividends are well covered on their own measures, but Duke carries net debt of 5.4x EBITDA against Chevron’s 0.5x.
- North Carolina’s ruling on Duke’s data-center tariff is due by mid-November, and Chevron details its 2027 spending in December.
Duke Energy (DUK) beat last year’s third quarter on Nov. 5, with adjusted EPS of $1.99 against $1.81. That came six days after Chevron (CVX) posted $12.0 billion of third-quarter free cash flow, up from $4.9 billion a year before.
Duke’s earnings come from rates its regulators set, while Chevron’s free cash flow rises and falls with oil prices. Duke pays the bigger yield today, but Chevron has grown its dividend nearly three times as fast. So which is the better dividend stock?
MetricChevron (CVX)Duke Energy (DUK)Dividend yield3.2%3.5%Dividend growth, fiscal 2020-20255.8% a year2.0% a yearConsecutive years of raises (company’s count)39Over 20Coverage, last reportedCash dividend payout ratio: 41% (TTM to Sept. 30, 2026)Payout ratio of normalized EPS: 67% (fiscal 2025)Net debt / EBITDA0.5×5.4xInterest coverage25.2×2.4x
Source: TIKR, Nov. 5, 2026; consecutive raises from each company’s earnings call.
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Chevron is swimming in cash
Chevron’s third quarter was strong almost everywhere, and net debt fell $7.8 billion from the second quarter.
All that cash covers the dividend easily. Over the twelve months to Sept. 30, dividends took a well-covered 41% of free cash flow, down from 77% in fiscal 2025. CFO Eimear Bonner said on the third-quarter call that Chevron’s first priority for its cash is to “grow the dividend consistently.” In October, it held the quarterly dividend at $1.78 a share, the rate it set at the start of 2026 with its 39th straight annual raise.
Free cash flow has covered the dividend in every fiscal year since 2021, but in only two of the five before that:
Chevron (CVX): free cash flow vs. common dividends paid, $ billions, fiscal 2016–2025 (TIKR)
In fiscal 2020, Chevron paid $9.65 billion of dividends on $1.66 billion of free cash flow. When oil crashes, its cash can all but disappear for a year.
Duke’s earnings climb, and so does its debt
Where Chevron’s cash swings with oil, Duke’s normalized EPS has risen every fiscal year since 2017, from $4.57 to $6.31 in fiscal 2025. On Nov. 5, it narrowed its 2026 adjusted EPS guidance to $6.70-$6.80 and stood by 5% to 7% annual growth through 2030.
That growth comes from a record build of 16 gigawatts of new capacity by 2031, much of it for data centers. On Oct. 7, Duke reached a deal with North Carolina’s Public Staff and four big tech companies that has data centers pay for at least 75% of their projected power needs each month. The state’s utilities commission is expected to rule by mid-November.
Earnings have outgrown the dividend, so its payout ratio fell from 77% of normalized EPS in fiscal 2018 to 67% in fiscal 2025:
Duke Energy (DUK): dividends per share vs. normalized EPS, $ per share, fiscal 2016–2025 (TIKR)
Duke’s July raise marked “over 20 years of consecutive annual dividend increases,” but the raises have been small, at 2.0% a year from fiscal 2020 to fiscal 2025.
Duke is also paying for its build with debt and new stock. It carries net debt of 5.4x EBITDA and covers its interest just 2.4x. It issued $2 billion of mandatory convertible equity units in August, and it plans to issue $125 million a year through its dividend reinvestment plan starting in 2027.
So which dividend wins?
For my money, Chevron is the better dividend stock.
Duke pays more today: $10,000 buys $350 a year of income, against $320 from Chevron. But at each company’s 5-year rate, Chevron’s income passes Duke’s in about two and a half years, in 2029. By year 10, that $10,000 would pay about $531 a year from Chevron, call it a 5.3% yield on your cash today, against about $419 from Duke.
And with net debt at 0.5x EBITDA, Chevron has the balance sheet to keep paying through a bad oil year, as it did in fiscal 2020.
Chevron also trades at 12x forward earnings, below its 5-year average of 14x:
Chevron (CVX): forward (NTM) P/E, last 5 years (TIKR)
Duke’s dividend is in fine shape, too. Its earnings have risen eight years running, its payout ratio is the lowest it’s been in ten fiscal years, and data centers give it a clear path to grow. But Duke is funding that growth with debt and new stock, while Chevron is paying its debt down.
Of course, Chevron’s cash will always move with oil prices. The next thing to watch is December, when Chevron gives more detail on its 2027 spending plans after meeting with its board.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
Source: www.tikr.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
