Dominion Energy Inc.’s D earnings estimates have been revised upward, indicating analysts’ optimism surrounding the stock. The Zacks Consensus Estimate for 2024 and 2025 earnings implies a year-over-year increase of 38.2% and 22.9%, respectively. The company delivered an earnings surprise of 6.52% in the last quarter.
 
Let us focus on the factors that make Dominion Energy a good investment option at the moment.

Dominion Energy’s Strong Investment Plan

Dominion Energy has well-chalked plans to invest $43 billion in different projects in the time frame of 2025-2029. These investments will be directed toward modernizing and strengthening the company’s existing infrastructure, which should enable D to better serve its expanding customer base. Dominion Energy continues to fortify its infrastructure by burying overhead power lines to reduce the time for restoration of power in outage-prone areas in the hurricane season.

Dominion Energy has plans to upgrade electric infrastructure by installing smart meters and grid devices, as well as enhance services to its customers through the customer information platform. The company is also working on a project of strategic undergrounding of 4,000 miles of distribution lines. It has already completed undergrounding nearly 2,000 miles of outage-prone overhead power distribution lines in Virginia.

Demand From Data Centers

Dominion Energy unit has been successfully supplying 4GW of electricity to nearly 94 data centers since 2019. The company have supplied electricity to quite a few new data centers in 2024.

Larger data centers are being developed in Dominion Energy’s service territories having electricity demand of 300 MW to several GWs, which is much higher than small conventional data center demand in the range of 60-90 MW. The increasing demand from the data centers will create fresh demand for Dominion Energy’s services and boost its earnings.

Solvency Ratio of Dominion Energy

The times interest earned ratio of the company at the end of third-quarter 2024 was 2.4, which indicates that Dominion Energy has enough financial capabilities to meet its interest obligation on time.

Dominion Energy’s Long-Term Growth and Dividend Yield

The company’s long-term (three to five-year) earnings growth is anticipated at 13.6%, courtesy of well-chalked-out capital investment plans, natural gas pipeline projects and renewable generation assets.

Its current dividend yield is 4.96% compared with the Zacks S&P 500 composite’s average of 1.61%.

Dominion Energy’s Price Movement

In the past six months, Dominion Energy’s shares have gained 12% compared with the industry’s growth of 7.3%.

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Dominion Energy’s Zacks Rank & Other Key Picks

Dominion Energy currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks from the same industry are PG&E Corporation PCG, IDACORP Inc. IDA and Vistra VST, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for PCG’s 2024 and 2025 earnings per share indicates year-over-year growth of 10.6% and 9.4%, respectively. The company delivered an earnings surprise of 7.28% in the last quarter.

IDA’s long-term earnings growth rate is 8.3%. The Zacks Consensus Estimate for IDA’s 2024 and 2025 EPS implies a year-over-year improvement of 5.5% and 8.3%, respectively.

VST’s long-term earnings growth rate is 17.4%. The Zacks Consensus Estimate for Vistra’s 2024 and 2025 EPS implies a year-over-year increase of 24.8% and 36.8%, respectively.

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