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Dominion Energy (D) to Gain From Investment, Customer Addition
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Dominion Energy Inc. (D - Free Report) has been gaining from steady capital investment, acquisitions, customer additions and organic initiatives. Due to these strategic moves, Dominion is likely to be a consistent performer over the long run.
Dominion Energy currently has a Zacks Rank #3 (Hold) and has delivered an average earnings surprise of 2.39% in the last four quarters. D’s long-term (three to five years) earnings growth is currently pegged at 6.59%. Moreover, Dominion Energy’s current dividend yield of 3.18% is better than the industry average of 3.09%.
Tailwinds
Dominion Energy plans to invest $32 billion in the 2021-2025 period to strengthen the existing infrastructure, of which a major portion will be invested in zero-carbon generation and energy storage. Over the next 15 years, the company aims at investing $72 billion for strengthening infrastructure and adding more clean power generation assets to the portfolio. The sale of gas transmission and storage assets to an affiliate of Berkshire has supported Dominion’s transition to regulated and sustainable operations. Currently, up to 88% of operating earnings are generated from the portfolio of regulated electric and natural gas utility companies.
Dominion Energy’s gas distribution registered strong customer growth in the past three years. The company will install smart meters and grid devices as well as enhance services to customers through the customer information platform. Dominion is also working on a project of strategic undergrounding of 4,000 miles of distribution lines and has completed undergrounding 1,300 miles of outage-prone overhead power distribution lines in Virginia. These initiatives will increase the resilience of D’s operations and enable it to serve the expanding customer base more efficiently. Dominion plans to invest up to $22 billion for the modernization of electric storage and electric grid transformation in the 2020-2035 period.
In May 2021, Dominion Energy acquired 100% ownership interest in Birdseye from BRE Holdings, LLC. Birdseye is primarily engaged in the development of solar energy projects in southeastern states in the United States, where 2.5 gigawatts of solar generation projects are under development. This acquisition will further expand Dominion’s renewable operations by investing a total of $37 billion in offshore wind and solar projects during the 2020-2035 period.
Headwinds
Dominion Energy is highly impacted by third-party dependence on the supply of natural gas. The decision to discontinue the Atlantic Coast Pipeline project is a major setback and would hurt Dominion’s goal of expanding the natural gas infrastructure. Dominion registered a loss of $19 million for the nine months of 2021 from investments in Atlantic Coast pipelines. The risk involved in operating nuclear facilities that will adversely impact earnings is another headwind.
Price Performance
In the past month, shares of Dominion Energy Inc. have rallied 1.4%, outperforming the industry’s 1.5% decline.
The Zacks Consensus Estimate for 2022 earnings per share of Ameren Corporation, American Electric Power and CMS Energy suggests year-over-year growth of 4.74%, 4.81% and 2.54%, respectively.
The long-term (three to five years) earnings growth ofAmeren Corporation, American Electric Power and CMS Energy is 7.45%, 5.66% and 6.97%, respectively.
AEE, AEP and CMS delivered an average earnings surprise of 6.65%, 1.61%, and 7.67%, respectively, in the last four quarters.
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Dominion Energy (D) to Gain From Investment, Customer Addition
Dominion Energy Inc. (D - Free Report) has been gaining from steady capital investment, acquisitions, customer additions and organic initiatives. Due to these strategic moves, Dominion is likely to be a consistent performer over the long run.
Dominion Energy currently has a Zacks Rank #3 (Hold) and has delivered an average earnings surprise of 2.39% in the last four quarters. D’s long-term (three to five years) earnings growth is currently pegged at 6.59%. Moreover, Dominion Energy’s current dividend yield of 3.18% is better than the industry average of 3.09%.
Tailwinds
Dominion Energy plans to invest $32 billion in the 2021-2025 period to strengthen the existing infrastructure, of which a major portion will be invested in zero-carbon generation and energy storage. Over the next 15 years, the company aims at investing $72 billion for strengthening infrastructure and adding more clean power generation assets to the portfolio. The sale of gas transmission and storage assets to an affiliate of Berkshire has supported Dominion’s transition to regulated and sustainable operations. Currently, up to 88% of operating earnings are generated from the portfolio of regulated electric and natural gas utility companies.
Dominion Energy’s gas distribution registered strong customer growth in the past three years. The company will install smart meters and grid devices as well as enhance services to customers through the customer information platform. Dominion is also working on a project of strategic undergrounding of 4,000 miles of distribution lines and has completed undergrounding 1,300 miles of outage-prone overhead power distribution lines in Virginia. These initiatives will increase the resilience of D’s operations and enable it to serve the expanding customer base more efficiently. Dominion plans to invest up to $22 billion for the modernization of electric storage and electric grid transformation in the 2020-2035 period.
In May 2021, Dominion Energy acquired 100% ownership interest in Birdseye from BRE Holdings, LLC. Birdseye is primarily engaged in the development of solar energy projects in southeastern states in the United States, where 2.5 gigawatts of solar generation projects are under development. This acquisition will further expand Dominion’s renewable operations by investing a total of $37 billion in offshore wind and solar projects during the 2020-2035 period.
Headwinds
Dominion Energy is highly impacted by third-party dependence on the supply of natural gas. The decision to discontinue the Atlantic Coast Pipeline project is a major setback and would hurt Dominion’s goal of expanding the natural gas infrastructure. Dominion registered a loss of $19 million for the nine months of 2021 from investments in Atlantic Coast pipelines. The risk involved in operating nuclear facilities that will adversely impact earnings is another headwind.
Price Performance
In the past month, shares of Dominion Energy Inc. have rallied 1.4%, outperforming the industry’s 1.5% decline.
Zacks Rank and Key Picks
Few similar-ranked stocks from the same industry are Ameren Corporation (AEE - Free Report) , American Electric Power Company (AEP - Free Report) and CMS Energy Corporation (CMS - Free Report) , each carrying a Zacks Rank of #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for 2022 earnings per share of Ameren Corporation, American Electric Power and CMS Energy suggests year-over-year growth of 4.74%, 4.81% and 2.54%, respectively.
The long-term (three to five years) earnings growth ofAmeren Corporation, American Electric Power and CMS Energy is 7.45%, 5.66% and 6.97%, respectively.
AEE, AEP and CMS delivered an average earnings surprise of 6.65%, 1.61%, and 7.67%, respectively, in the last four quarters.