- Introduction to Dominion as Company
Dominion Energy, Inc. is one of the largest energy companies in the United States, supplying electricity and natural gas to millions of customers across multiple states. As the world transitions toward more sustainable energy solutions, Dominion Energy has been at the forefront of embracing innovative approaches while maintaining its commitment to reliability and affordability. Dominion Energy has positioned itself as a leader in the transition to clean energy while continuing to provide essential services to homes and businesses.
History and Background
Dominion Energy was originally founded as the Virginia Railway & Power Company in 1909. Over the decades, it underwent several transformations and mergers to become the Dominion Energy we know today. Headquartered in Richmond, Virginia, the company has expanded its reach and diversified its energy portfolio, integrating renewable energy sources into its traditional mix of fossil fuels and nuclear power.
In the late 20th and early 21st centuries, Dominion Energy aggressively expanded its operations through acquisitions and infrastructure projects. Notable acquisitions include Consolidated Natural Gas Company in 2000 and Questar Corporation in 2016, which strengthened its position in natural gas distribution. The company has also sold off certain non-core assets, such as its gas transmission and storage business to Berkshire Hathaway Energy in 2020, allowing it to focus more on its regulated utility operations and clean energy investments.
Operation and Service Areas
Dominion Energy serves more than 7 million customers across 16 states, primarily in the Midwest, Mid-Atlantic, and Southeastern regions of the United States. The company operates through major business segments:
- Dominion Energy Virginia – This segment focuses on electricity generation, transmission, and distribution in Virginia and North Carolina. It is the backbone of the company’s regulated electric utility business, serving over 2.5 million customers.
- Gas Infrastructure Group – This segment handles natural gas transmission, storage, and distribution, serving millions of residential, commercial, and industrial customers. Dominion has extensive natural gas pipelines and underground storage facilities that play a crucial role in the nation’s energy infrastructure.
- Contracted Generation – This segment manages long-term renewable energy projects and agreements, ensuring that Dominion is a key player in the transition toward cleaner energy sources.
Illustration 1: Logo of Dominion Energy symbolizing energy flow, innovation, strength and environmental commitment.
Energy Portfolio and Sustainability Initiatives
Dominion Energy is at the forefront of the clean energy movement. The company has pledged to achieve net-zero carbon dioxide (CO2) and methane emissions by 2050, aligning with global sustainability goals. Some of its key initiatives include:
Renewable Energy Expansion: Dominion Energy is investing heavily in solar and wind energy projects, including the Coastal Virginia Offshore Wind (CVOW) project, which is the largest offshore wind farm under development in the United States. The company is also developing large-scale solar farms across Virginia and other states.
Nuclear Energy Commitment: The company continues to operate nuclear power plants, which provide reliable, carbon-free electricity. Dominion owns and operates several nuclear plants, including the North Anna and Surry plants in Virginia, which together generate a significant portion of the region’s power needs.
Hydrogen and Battery Storage: Dominion is exploring hydrogen energy storage and battery technology to enhance grid stability and integrate more renewable energy sources. It has begun pilot programs to test hydrogen’s viability as a clean energy source.
Grid Modernization: Dominion Energy is investing in smart grid technology, which includes the deployment of smart meters, automated distribution systems, and enhanced cybersecurity measures to improve reliability and efficiency.
Energy Efficiency Programs: The company has introduced various customer-focused programs that promote energy conservation, such as home energy assessments, rebates for energy-efficient appliances, and demand response programs that help reduce peak electricity usage.
Illustration 2: Nuclear Power plants, something Dominion is heavly committed to.
Challenges and Controversies
Like any major corporation, Dominion Energy has faced challenges and controversies. Some of these include:
Environmental Concerns: While making strides in sustainability, the company has faced criticism over past reliance on fossil fuels and its handling of coal ash disposal. Environmental groups have also raised concerns about certain pipeline projects that have been accused of disrupting ecosystems and communities.
Regulatory and Legal Issues: Dominion operates in a highly regulated industry and has had disputes over rate adjustments, infrastructure expansion, and compliance with federal and state environmental laws.
Public Pushback: Some large-scale energy projects, including natural gas pipelines and transmission lines, have met resistance from communities concerned about environmental and land use impacts. Protests and legal battles have delayed or halted some initiatives.
Future Outlook
Despite challenges, Dominion Energy is well-positioned for the future. The increasing focus on renewable energy, federal support for clean energy initiatives, and its strategic investments in infrastructure suggest continued growth. As the company progresses toward its net-zero emissions target, it remains committed to innovation and sustainability.
Several factors will shape Dominion Energy’s future:
Expansion of Offshore Wind: The Coastal Virginia Offshore Wind project will play a critical role in achieving clean energy goals. As more offshore wind projects receive government backing, Dominion stands to benefit from regulatory support and technological advancements.
Electrification of Transportation: As electric vehicle (EV) adoption grows, Dominion Energy is investing in EV infrastructure, including charging stations and grid upgrades to accommodate increased demand.
Advancements in Energy Storage: The development of more efficient and cost-effective battery storage solutions will be crucial for integrating intermittent renewable energy sources like solar and wind.
Political Activity and Charitable Contributions
The Dominion Political Action Committee (PAC) has been very active in donating to Virginia candidates. In 2009, the Dominion PAC donated a total of $814,885 with 56% going to Republicans and 41% to Democrats.Lobbyists for Dominion worked to pass West Virginia’s Critical Infrastructure Protection Act, a 2021 law creating felony penalties for protests targeting oil and gas facilities, which was described by its sponsor John Kelly as having been “requested by the natural gas industry”.
Dominion’s social investment program is carried out primarily through the Dominion Foundation, which gives about $20 million each year to charities in the states in which Dominion does business.
Dominion Energy Generation
Illustration 3 and 4: Dominion Energy Generation allocation in 2019 vs. expected generation allocation in 2035.
As can be deducted from illustration 3 and 4, in 2019 12% of Domion’s total electric production came from Coal, 5% from Solar, wind, hydro and biomass, 42% from natural gas and 42% from nuclear Energy.
Based on Illustrations 3 and 4, Dominion’s energy mix in 2019 consisted of 12% from coal, 5% from renewable sources (solar, wind, hydro, and biomass), 42% from natural gas, and another 42% from nuclear energy.
Illustration 5: Offshore wind farms, a sector Dominion is and will heavly invest in.
This distribution highlights Dominion’s significant presence in the nuclear energy sector, which is poised for substantial growth in the coming years due to the rising demand for reliable power driven by AI development. Additionally, Dominion remains a key player in the natural gas market.
However, as illustrated in Figure 4, the company aims to expand its renewable energy portfolio—boosting solar, wind, and hydro to 33%—while significantly reducing its reliance on coal and natural gas. This strategic shift positions Dominion as one of the most forward-thinking energy companies in the U.S. today.
2. Stock Analysis
In this section we will analyze Dominion Energy stock to see if it is a good stock to buy or not. Our philosophy is value investing meaning that we try to find good quality companies that are undervalued. However, we will give a holistic overview so all kind of investors with different philosophies can judge the stock for themselves.
Revenue and Profits
To determine a company’s worth and if it is worth investing in, the company’s revenue and profits are a natural starting point to analyze. It should never bee forgotten that a stock represents a company just like the small businesses in your home town. If someone asked you if you want to buy their company, the first question would naturally be how much the company makes and the same question when trying to analyze if a company registered in the stock exchange is worth buying.
Illustration 6 and 7: Revenue of Dominion from 2009 to 2023.
As seen in Illustrations 6 and 7, Dominion Energy’s revenue has remained relatively flat over the past 14 years, showing no significant growth. In fact, the overall trend has been slightly downward, with the company generating higher revenue in 2009 than in 2023, despite only minor fluctuations over time. The lack of revenue growth, despite an expanding energy market and increasing demand for utilities, raises concerns about the company’s ability to capitalize on industry trends and drive long-term value for shareholders. This stagnation may indicate challenges in pricing power, customer acquisition, or strategic investments, which could impact future profitability and competitiveness.
The Company itself has made a lot of promises for the future and has positioned itself as one of the leaders in nuclear energy and green energy in the US. However, it’s past revenue record is not impressive, and shows that company had a hard time gaining revenue on its past focus areas.
Illustration 8 and 9: Net Income of Dominion Energy from 2009 to 2023.
Net income is a crucial metric to evaluate when determining whether a company is a worthwhile investment. It represents a company’s net profit or loss after accounting for all revenues, income items, and expenses, calculated as Net Income = Revenue – Expenses.
As illustrated in Illustrations 8 and 9, Dominion Energy’s net income has remained relatively low over the past 14 years, which is notable given its size and position as a leading player in the U.S. nuclear energy sector. One key factor contributing to this is the company’s significant investment in green energy initiatives, such as the wind farm in the Carolinas, which has increased expenses and put pressure on profitability.
Moreover, Dominion Energy’s net income has been highly volatile, with large swings rather than a stable or upward trend—an aspect that raises concerns for investors. The lack of consistent growth in net income, coupled with periods of negative earnings, such as in 2020, is a major red flag. This suggests potential challenges in cost management, operational efficiency, or market positioning, which could impact long-term shareholder value and financial stability. The largest cost and expenses for Dominion Energy are Cost of Goods Sold (COGS) primarily expenses related to fuel, purchased power, operation, and maintenance costs necessary to generate and distribute electricity and natural gas. This shows that the business in itself isn’t as profitable when the costs eats away such a large part of the revenue.
Revenue breakdown
Illustration 10: Revenue Breakdown for Dominion Energy gathered from Yahoo finance
As illustrated in Illustration 10, Dominion Energy has a diverse range of revenue sources, unlike many companies that rely heavily on a single stream. This diversification is a positive factor, as it reduces the company’s vulnerability to fluctuations in any one revenue source, allowing it to maintain stability even if one segment underperforms.
However, Illustration 10 also highlights that Dominion Energy’s Cost of Goods Sold (COGS) represents a significant expense, which heavily impacts profitability. COGS includes costs related to fuel, purchased power, and operational expenses necessary for electricity and natural gas distribution. Given the nature of the utility industry, substantial costs such as fuel prices, electricity procurement, and depreciation are expected. Nonetheless, the high COGS suggests that Dominion Energy currently operates with relatively thin profit margins, limiting its overall profitability.
Earnings per shar (EPS)
Earnings Per Share (EPS) is a key financial metric that measures a company’s profitability on a per-share basis. It indicates how much profit a company generates for each outstanding share of its stock, and is used o assess a company’s financial health, profitability, and potential for growth. In other words this metric can tell us how profitable the business is,
Illustration 11: EPS for Dominion Energy from 2009 to 2023
The EPS figure itself isn’t the primary focus for value investors—it can be 0.2 or 10, but what truly matters is the price-to-earnings (P/E) ratio and the company’s ability to generate consistent earnings growth. A steadily increasing EPS over time signals strong financial health, profitability, and long-term value creation.
As illustrated in Illustration 11, Dominion Energy’s EPS has not shown meaningful growth over time, remaining at a similar level in 2023 as it was in 2009. Additionally, the EPS has been highly volatile, with large fluctuations rather than a stable upward trend—even turning negative in 2020. This inconsistency is a red flag for potential investors, as it suggests earnings instability, which can make future profitability unpredictable and increase investment risk.
Assets and Liabilities
Illustration 12 and 13: Assets, Liabilities and Total Shareholder Equity for Dominion Energy from 2009 to 2023.
When evaluating a company as a potential investment, understanding its assets and liabilities is crucial. If a local business owner offered to sell their shop, one of the first questions—after determining its profitability—would be about its equity and assets. The same principle applies when assessing publicly traded companies like Dominion Energy.
As shown in Illustrations 12 and 13, Dominion Energy has a strong asset base, with total assets growing steadily from $42,554 million in 2009 to $109,032 million in 2023. At the same time, total liabilities have also increased, rising from $31,369 million in 2009 to $81,503 million in 2024. However, this is not necessarily a red flag, as it is common for utility companies to see both assets and liabilities grow over time. Expanding operations, launching new utility projects, and building infrastructure—such as power plants and renewable energy facilities—naturally lead to higher debt levels.
The main concern in Dominion Energy’s balance sheet is its low cash on hand, which stood at just $184 million in 2023. Given the company’s size and debt obligations, this limited liquidity could pose a risk if unexpected financial challenges arise. Furthermore, Dominion Energy’s cash reserves have remained relatively stagnant over the past 14 years, rather than growing in line with its assets and liabilities. A stronger cash position would provide greater financial flexibility and resilience in times of economic uncertainty.
As seen in Illustration 13, Total Shareholder Equity—calculated as total assets minus total liabilities—has consistently grown over the past 14 years. This is a positive indicator for potential investors, as it suggests that Dominion Energy is building value over time rather than eroding its financial foundation. A steadily increasing shareholder equity indicates that the company’s assets are growing at a faster rate than its liabilities, which is a green flag for financial health. This trend suggests that Dominion Energy is successfully expanding its operations while maintaining a solid balance sheet. Additionally, rising equity provides a buffer against financial downturns, making the company more resilient in times of economic uncertainty. However, investors should also consider how this growth is achieved—whether through profitable operations or increased debt financing—to fully assess the sustainability of this trend.
Debt to Equity Ratio
Illustration 14 and 15: Debt to Equity Ratio of Dominion Energy from 2009 to 2023
The Debt-to-Equity (D/E) ratio is a key financial metric used to assess a company’s financial leverage and risk. It measures how much debt a company uses to finance its operations relative to shareholder equity. A high D/E ratio (greater than 1.0) suggests that the company relies heavily on debt financing, which can amplify financial risk, particularly during economic downturns when debt obligations may become more difficult to manage. In contrast, a low D/E ratio (below 1.0) indicates that the company is primarily financed through equity rather than debt, reducing financial risk but potentially limiting rapid expansion. A negative D/E ratio, on the other hand, signals that a company has more liabilities than equity—often considered a warning sign for investors.
Legendary value investors like Warren Buffett favor companies with a D/E ratio below 0.5, meaning they have at least twice as much equity as debt. Buffett avoids companies with excessive debt since high interest payments can erode profits, particularly in periods of economic instability. Additionally, he prioritizes businesses that maintain a stable or declining D/E ratio over time rather than those that take on large amounts of debt unexpectedly.
As illustrated in Figures 14 and 15, Dominion Energy’s Debt-to-Equity (D/E) ratio has remained consistently high, exceeding 2 and approaching 3 in recent years. This is a red flag for potential investors, as it indicates that the company relies heavily on debt to finance its operations and expansion. If interest rates rise or the company faces unexpected financial challenges, servicing this high level of debt could become more difficult, potentially impacting profitability and shareholder returns. Investors should closely monitor whether Dominion Energy can effectively manage its debt burden while continuing to grow its business.
Price to earnings ratio (P/E)
Illustration 15 and 16: P/E of Dominion Energy from 2010 to 2025.
For value investors, the most important metric when evaluating a stock is the price-to-earnings (P/E) ratio, which helps determine whether a company is undervalued or overvalued. Even if a company has outstanding financials, buying its stock at an excessively high price can lead to poor returns. To illustrate this, imagine that a local small business generates solid profits. The Business earns 1 million dollars in profit each year. One day the owner offers to sell you the business for $1, it would be an incredible deal. However, if he tries to sell it for $1 trillion dollars, no matter how successful the shop is, the price would be absurdly overvalued. The stock market operates in a similar way—companies can be cheaply priced on some days and highly expensive on others.
Legendary value investor Warren Buffett typically considers stocks with a P/E ratio of 15 or lower to be “bargains.” A high P/E ratio suggests that investors are paying a premium for the company’s earnings, potentially expecting significant growth. However, it also means that the stock is far more expensive compared to its earnings, which can be a red flag for value investors. The P/E ratio of the company has swinged widely in the past. It has went from bargain territory of only 4,93 in 2011 to strongly overpriced in 2021 with P/E of 62,2. However, the value today of 19,76 can be said to be around fairly priced. The company is at least not undervalued, and is as such not a good investment for any valueinvestor.
Dividend
Illustration 17 and 18: Dividend Payout in USD , and Dividend yield in % from 2005 to 2025. From makrotrends.
Dominion Energy offers a dividend yield of approximately 4.78%, which is attractive compared to the average yield in the utilities sector. This high yield can be appealing to income-focused investors seeking regular returns, and can be very appealing for income focused investors and for dividend investors.
However, the company’s dividend payout ratio—the proportion of earnings paid out as dividends—is notably high. Based on trailing earnings, the payout ratio stands at 93.68%, and it’s projected to be 96.74% for the current year. Such elevated payout ratios may not be sustainable in the long term, as they leave limited room for reinvestment into the company’s operations and growth initiative .For long-term growth investors, the high payout ratio and limited reinvestment ability might be a red flag indicating financial strain.
To Summarize:
✅ Green Flag:
- Attractive Yield: With a ~5% dividend yield, Dominion Energy provides a solid income stream, which is appealing to dividend and income-focused investors.
- Consistent Payout: The company has a history of paying dividends regularly, which suggests a commitment to returning capital to shareholders.
🚩 Red Flag:
- Sustainability Concern: If earnings decline or debt obligations increase, maintaining such a high dividend could become unsustainable, leading to potential dividend cuts in the future.
- High Payout Ratio (~94%): This means that nearly all of Dominion’s earnings are used to pay dividends, leaving little room for reinvestment in business growth.
Insider Trading
A crucial metric to consider when evaluating whether a company is worth investing in is insider trading activity—specifically, whether company insiders have been buying or selling shares over the past year. It’s particularly important to assess who has been trading, as directors should be monitored even more closely than officers.
As can be seen from the table below, there has been no selling by any insiders recently. This is a green flag for investors since it shows that insiders are confident in the company as they have not sold their shares.
Illustration 19: Insider Trading register of Dominion Energy from Yahoo Finance
Other Company info
As illustrated below, Dominion Energy currently have 17,7 thousands employees which showcases a gradual increase from the 14,5 thousand employees it had in 2014. The company itself was founded in 1983, but was formerly known as Dominion Resources to 2017. It has the ticker D and is listed on the NYSE exchange. Its industry is officially Multi-Utilities and is in the Utilities sector. It has currently 840.01 million shares outstanding, and a Market Cap of USD 47.309 Billion. Its website is www.dominionenergy.com.
Dominion Energy has its headquarters at 120 Tredgar Street,, Richmond, Virginia 23219, United States of America.
Illustration 20-22: Number of employees at Dominion and its location in Richmond Virginia.
Final Verdict
Dominion Energy presents an interesting long-term opportunity, particularly for investors interested in renewable energy and nuclear power. The company is making significant investments in these sectors, which could position it well for the future energy transition. However, its financial health raises concerns.
While Dominion Energy has a strong asset base, its long-term debt and total liabilities continue to rise each year, increasing its financial risk. A substantial portion of its revenue is consumed by COGS and operating expenses, limiting profitability. As a result, the company is not highly profitable at present, and some of its expansion plans have failed to deliver expected results.
From a value investing perspective, Dominion Energy does not appear undervalued, making it a less attractive option for those seeking undervalued stocks with strong financials. While its dividend yield is high, it is unsustainable due to the company’s high payout ratio and inconsistent earnings. Investors should carefully weigh the long-term growth potential in renewable energy against the financial risks and limited profitability before making an investment decision. Our recommendation is not not to buy. If you like our content please consider becoming a subscriber by writing your e-mail below.