Duke Energy (NYSE:DUK) is one of the largest regulated utilities in the country, and it is in the middle of transforming itself. Following the acquisition of Piedmont Natural Gas and the sale of nearly all of its unregulated businesses, Duke is moving forward with an ambitious spending plan to spur long-term growth. The valuation is in line with peers, although it is higher than the company's long-term average. Additionally, poor returns on capital are a key risk going forward.

Duke's grid is the largest in the nation at 300,000 miles, which equates to a lot of money spent on maintaining infrastructure. The utility has transformed by shedding all of its international and unregulated assets, buying a natural gas utility, and focusing on building out its infrastructure. Its natural gas transmission lines extend to 1.6 million customers across 32,900 miles of pipe. This number will grow significantly in the coming years as new projects are brought on-line, especially the Atlantic Coast Pipeline.

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