Comparative Analysis of Dominion Energy and NextEra Energy
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Source: NASDAQ.COM
- Electricity Demand Surge: Driven by investments in artificial intelligence, electricity demand has surged, benefiting utilities like Dominion Energy and NextEra Energy, particularly with Dominion's strong position in one of the world's largest data center markets.
- Dividend Yield Comparison: Dominion Energy boasts a dividend yield of 4.2%, significantly higher than NextEra Energy's 2.7% and the average utility yield of 2.6%; however, its historical failure to meet dividend growth expectations has led to diminished investor confidence.
- Execution Performance Divergence: NextEra Energy demonstrates superior execution, consistently delivering on its promised 10% dividend growth, while Dominion Energy has cut dividends due to the sale of pipelines and natural gas operations, resulting in a loss of trust among investors.
- Future Growth Outlook: Although NextEra Energy's dividend growth is expected to slow from 10% in 2026 to 6% in 2027 and 2028, this rate remains above historical inflation, indicating a stable business foundation and credible management guidance.
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Analyst Views on D
Wall Street analysts forecast D stock price to rise
12 Analyst Rating
2 Buy
9 Hold
1 Sell
Hold
Current: 62.480
Low
59.00
Averages
64.36
High
70.00
Current: 62.480
Low
59.00
Averages
64.36
High
70.00
About D
Dominion Energy, Inc. provides regulated electricity service to 3.6 million homes and businesses in Virginia, North Carolina and South Carolina, and regulated natural gas service to 500,000 customers in South Carolina. It develops and operates regulated offshore wind and solar power and is the producer of carbon-free electricity in New England. Its Dominion Energy Virginia segment includes Virginia Power’s regulated electric transmission, distribution and generation operations, which serve homes and businesses in Virginia and North Carolina. Its Dominion Energy South Carolina segment includes DESC’s generation, transmission and distribution of electricity to customers in the central, southern and southwestern portions of South Carolina and the distribution of natural gas to residential, commercial and industrial customers in South Carolina. Its Contracted Energy segment includes nonregulated long-term contracted renewable electric generation fleet and renewable natural gas facilities.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Surge in Electricity Demand Benefits Utilities
- Surge in Demand: The significant increase in electricity demand is poised to greatly benefit utilities like Dominion Energy and NextEra Energy, with Dominion's 4.2% dividend yield notably surpassing NextEra's 2.7% and the average utility yield of 2.6%.
- Dominion's Challenges: Despite its attractive yield, Dominion Energy has a history of failing to meet its own targets, having once promised 10% dividend growth but subsequently cut dividends after selling pipelines and natural gas operations, leading investors to adopt a cautious outlook on its future growth.
- NextEra's Stability: In contrast, NextEra Energy demonstrates strong execution, consistently delivering on its 10% dividend growth promises, supported by a large regulated utility base in Florida and a robust renewable energy business that drives its growth.
- Importance of Trust: For dividend investors relying on payouts for living expenses, trust is crucial; while Dominion's higher yield is appealing, its failure to meet commitments has eroded investor confidence, making NextEra's stable performance a more reliable choice despite its lower yield.
See More
Comparative Analysis of Dominion Energy and NextEra Energy
- Electricity Demand Surge: Driven by investments in artificial intelligence, electricity demand has surged, benefiting utilities like Dominion Energy and NextEra Energy, particularly with Dominion's strong position in one of the world's largest data center markets.
- Dividend Yield Comparison: Dominion Energy boasts a dividend yield of 4.2%, significantly higher than NextEra Energy's 2.7% and the average utility yield of 2.6%; however, its historical failure to meet dividend growth expectations has led to diminished investor confidence.
- Execution Performance Divergence: NextEra Energy demonstrates superior execution, consistently delivering on its promised 10% dividend growth, while Dominion Energy has cut dividends due to the sale of pipelines and natural gas operations, resulting in a loss of trust among investors.
- Future Growth Outlook: Although NextEra Energy's dividend growth is expected to slow from 10% in 2026 to 6% in 2027 and 2028, this rate remains above historical inflation, indicating a stable business foundation and credible management guidance.
See More
Electricity Demand Surge Benefits Utilities
- Dividend Yield Comparison: Dominion Energy boasts a 4.2% dividend yield, significantly higher than NextEra Energy's 2.7% and the average utility yield of 2.6%, indicating Dominion's advantage in attracting income-seeking investors.
- Execution History Divergence: Despite Dominion Energy's past promises of 10% dividend growth, it has failed to deliver due to divestitures of pipelines and natural gas operations, leading to a cautious investor sentiment regarding its future growth commitments and impacting market confidence.
- NextEra's Stable Growth: Known for its reliable execution, NextEra Energy typically fulfills its 10% dividend growth commitments, supported by a robust renewable energy business, although growth is expected to slow to 6% in 2027 and 2028.
- Importance of Investor Trust: Trust is crucial for investors relying on dividends for living expenses, and NextEra Energy's historical performance positions it as a more reliable choice, despite its lower yield compared to Dominion Energy.
See More
Maine Set to Enact First Statewide Data Center Construction Ban
- Data Center Construction Ban: Maine lawmakers have approved a bill to prohibit data center construction until November 2027, a move that could influence other states to adopt similar measures and hinder the rapidly growing industry.
- Energy Price Concerns: The measure aims to prevent data centers from driving up electricity prices for Maine residents, facing strong opposition from tech groups and businesses who argue that even a temporary halt in construction will set the state back in competition.
- Political Implications: While Maine has not attracted major data center projects, thousands of new projects are underway across the U.S., making the potential impacts of data centers a focal point in political debates, especially amid the AI boom.
- Regulatory Process Controversy: The Maine Chamber of Commerce president argues that the existing regulatory framework is sufficient to ensure new data centers do not negatively impact electricity costs or the environment, asserting that a moratorium is an inappropriate approach that could hinder the state's economic recovery.
See More
Enbridge Energy Stock Rallies 30% Amid Growth and Expansion
- Stock Performance: Enbridge's stock has rallied over 30% in the past 12 months, currently hovering near its all-time high, indicating strong market performance and investor confidence.
- Revenue Growth: The company expects its adjusted EBITDA to grow at a 9.3% CAGR from $14 billion CAD to $19.95 billion CAD from 2021 to 2025, reflecting sustained profitability and market demand.
- Cash Flow Improvement: Enbridge's distributable cash flow (DCF) increased from $10.04 billion CAD to $12.45 billion CAD, with DCF per share growing at a 3.6% CAGR to $5.71 CAD, ensuring its ability to maintain stable dividend payments.
- Strategic Expansion: Enbridge plans to raise its adjusted EBITDA to $20.2-$20.8 billion CAD by 2026 and further solidify its market position through $8 billion CAD in new projects, demonstrating confidence in future growth.
See More
Enbridge: A Stable Defensive Stock with Attractive Valuation
- Stable Income: Enbridge offers a dividend yield of approximately 5.2% and has raised its payout for 31 consecutive years, demonstrating strong cash flow and profitability that attract long-term investors.
- Growth Potential: The company expects its adjusted EBITDA to grow from CAD 14 billion to CAD 19.95 billion by 2025, reflecting a 9.3% CAGR, indicating successful strategic expansion and acquisitions.
- Market Performance: Enbridge's stock has rallied over 30% in the past 12 months and is hovering near its all-time high, although it remains 12% below analysts' target price of CAD 85, highlighting its market appeal.
- Risk Resilience: The company's business model is well-insulated from commodity price volatility, relying on stable cash flows from pipeline operations, and it plans to enhance its competitive edge with CAD 8 billion in new projects coming online this year.
See More
Surge in Electricity Demand Benefits Utilities
- Surge in Demand: The significant increase in electricity demand is poised to greatly benefit utilities like Dominion Energy and NextEra Energy, with Dominion's 4.2% dividend yield notably surpassing NextEra's 2.7% and the average utility yield of 2.6%.
- Dominion's Challenges: Despite its attractive yield, Dominion Energy has a history of failing to meet its own targets, having once promised 10% dividend growth but subsequently cut dividends after selling pipelines and natural gas operations, leading investors to adopt a cautious outlook on its future growth.
- NextEra's Stability: In contrast, NextEra Energy demonstrates strong execution, consistently delivering on its 10% dividend growth promises, supported by a large regulated utility base in Florida and a robust renewable energy business that drives its growth.
- Importance of Trust: For dividend investors relying on payouts for living expenses, trust is crucial; while Dominion's higher yield is appealing, its failure to meet commitments has eroded investor confidence, making NextEra's stable performance a more reliable choice despite its lower yield.
See More
Comparative Analysis of Dominion Energy and NextEra Energy
- Electricity Demand Surge: Driven by investments in artificial intelligence, electricity demand has surged, benefiting utilities like Dominion Energy and NextEra Energy, particularly with Dominion's strong position in one of the world's largest data center markets.
- Dividend Yield Comparison: Dominion Energy boasts a dividend yield of 4.2%, significantly higher than NextEra Energy's 2.7% and the average utility yield of 2.6%; however, its historical failure to meet dividend growth expectations has led to diminished investor confidence.
- Execution Performance Divergence: NextEra Energy demonstrates superior execution, consistently delivering on its promised 10% dividend growth, while Dominion Energy has cut dividends due to the sale of pipelines and natural gas operations, resulting in a loss of trust among investors.
- Future Growth Outlook: Although NextEra Energy's dividend growth is expected to slow from 10% in 2026 to 6% in 2027 and 2028, this rate remains above historical inflation, indicating a stable business foundation and credible management guidance.
See More
Electricity Demand Surge Benefits Utilities
- Dividend Yield Comparison: Dominion Energy boasts a 4.2% dividend yield, significantly higher than NextEra Energy's 2.7% and the average utility yield of 2.6%, indicating Dominion's advantage in attracting income-seeking investors.
- Execution History Divergence: Despite Dominion Energy's past promises of 10% dividend growth, it has failed to deliver due to divestitures of pipelines and natural gas operations, leading to a cautious investor sentiment regarding its future growth commitments and impacting market confidence.
- NextEra's Stable Growth: Known for its reliable execution, NextEra Energy typically fulfills its 10% dividend growth commitments, supported by a robust renewable energy business, although growth is expected to slow to 6% in 2027 and 2028.
- Importance of Investor Trust: Trust is crucial for investors relying on dividends for living expenses, and NextEra Energy's historical performance positions it as a more reliable choice, despite its lower yield compared to Dominion Energy.
See More
Maine Set to Enact First Statewide Data Center Construction Ban
- Data Center Construction Ban: Maine lawmakers have approved a bill to prohibit data center construction until November 2027, a move that could influence other states to adopt similar measures and hinder the rapidly growing industry.
- Energy Price Concerns: The measure aims to prevent data centers from driving up electricity prices for Maine residents, facing strong opposition from tech groups and businesses who argue that even a temporary halt in construction will set the state back in competition.
- Political Implications: While Maine has not attracted major data center projects, thousands of new projects are underway across the U.S., making the potential impacts of data centers a focal point in political debates, especially amid the AI boom.
- Regulatory Process Controversy: The Maine Chamber of Commerce president argues that the existing regulatory framework is sufficient to ensure new data centers do not negatively impact electricity costs or the environment, asserting that a moratorium is an inappropriate approach that could hinder the state's economic recovery.
See More
Enbridge Energy Stock Rallies 30% Amid Growth and Expansion
- Stock Performance: Enbridge's stock has rallied over 30% in the past 12 months, currently hovering near its all-time high, indicating strong market performance and investor confidence.
- Revenue Growth: The company expects its adjusted EBITDA to grow at a 9.3% CAGR from $14 billion CAD to $19.95 billion CAD from 2021 to 2025, reflecting sustained profitability and market demand.
- Cash Flow Improvement: Enbridge's distributable cash flow (DCF) increased from $10.04 billion CAD to $12.45 billion CAD, with DCF per share growing at a 3.6% CAGR to $5.71 CAD, ensuring its ability to maintain stable dividend payments.
- Strategic Expansion: Enbridge plans to raise its adjusted EBITDA to $20.2-$20.8 billion CAD by 2026 and further solidify its market position through $8 billion CAD in new projects, demonstrating confidence in future growth.
See More
Enbridge: A Stable Defensive Stock with Attractive Valuation
- Stable Income: Enbridge offers a dividend yield of approximately 5.2% and has raised its payout for 31 consecutive years, demonstrating strong cash flow and profitability that attract long-term investors.
- Growth Potential: The company expects its adjusted EBITDA to grow from CAD 14 billion to CAD 19.95 billion by 2025, reflecting a 9.3% CAGR, indicating successful strategic expansion and acquisitions.
- Market Performance: Enbridge's stock has rallied over 30% in the past 12 months and is hovering near its all-time high, although it remains 12% below analysts' target price of CAD 85, highlighting its market appeal.
- Risk Resilience: The company's business model is well-insulated from commodity price volatility, relying on stable cash flows from pipeline operations, and it plans to enhance its competitive edge with CAD 8 billion in new projects coming online this year.
See More
