Richmond, Virginia-based Dominion Energy, Inc. (D) provides regulated electricity and natural gas services. Valued at a market cap of $50.4 billion, the company is ready to announce its fiscal Q4 earnings for 2025 on Monday, Feb. 23. Ahead of this event, analysts expect this utility company to report a profit of $0.69 per share, up 19% from $0.58 per share in the year-ago quarter. The company has topped Wall Street’s bottom-line estimates in each of the last four quarters. In Q3, its EPS of $1.06 exceeded ...

For individuals who prefer to join via telephone, domestic callers should dial 1-800-445-7795 and international callers should dial 1-785-424-1699. The conference ID for the telephonic earnings call is DOMINION. Participants should dial in 10 to 15 minutes prior to the scheduled start time. A replay of the webcast will be available on the investor information pages by the end of the day February 23. A telephonic replay of the earnings call will be available beginning at about 2 p.m. ET on February 23. Domes ...

Core Viewpoint - Dominion Energy has proposed a 12.7% increase in residential customer bills in South Carolina to fund system upgrades and meet rising electricity demand [1][5]. Group 1: Rate Proposal and Regulatory Context - The South Carolina Public Service Commission is expected to decide on the proposed rate changes by July 2, with implementation in the first billing cycle of that month [2]. - Dominion is seeking a return on equity (ROE) of 10.5%, higher than the 9.94% allowed for 2024, which reflects the company's view of current financial markets and business risks [2][3]. - The average ROE for electric utilities in rate cases during the first nine months of 2025 was 9.66%, with an average of 9.74% for 2024 [2]. Group 2: Demand Growth and Financial Justification - Electric demand in South Carolina is projected to grow at an annual rate of 1.2%, leading to a 25% increase by 2044 [4]. - Dominion has requested a revenue increase of approximately $322 million to support $1.4 billion in investments in the electric grid [4]. - The company’s capital structure is proposed at 53.52% equity and 46.48% debt [4]. Group 3: Impact of External Factors - The proposed revenue increase also addresses the aftermath of Hurricane Helene in 2024, which necessitated the largest restoration and rebuild effort in the company's history [5]. - If approved, the average residential bill for a customer using 1,000 kWh monthly would rise by about $20 to $177, while commercial and industrial customers would see increases of approximately 5.9% and 14.9%, respectively [5]. - Dominion attributes rising costs to a growing customer base, tariffs, inflation, and increased regulatory obligations related to grid security and environmental compliance [6].

Core Viewpoint - Warren Buffett has stepped down from making final investment decisions for Berkshire Hathaway, with Greg Abel now in charge, although Abel is expected to maintain a similar investment strategy to Buffett's [1][2]. Group 1: Potential Investments - Greg Abel is predicted to increase Berkshire Hathaway's stake in Alphabet, as Buffett had previously regretted not investing sooner, and Abel may appreciate the company's strong cash flow and business moats [4][5][6]. - Dominion Energy is seen as a strong candidate for investment due to its regulated monopoly status and attractive dividend yield of over 4.5%, aligning with Buffett's preference for dividend-paying companies [8][11][12]. - Mitsui is likely to see an increase in Berkshire's ownership, as it currently holds a smaller stake compared to other Japanese companies, and both Buffett and Abel have expressed positive sentiments about their investments in Japan [13][15][16].

Core Insights - Dominion Energy is experiencing bullish momentum as it trades above its 200-day simple moving average (SMA), indicating positive investor sentiment and growth prospects [2][9]. Investment Strategy - The company has a long-term capital expenditure plan, with an investment of nearly $50 billion planned for 2025-2029 to enhance its regulated infrastructure and clean energy assets [3][12]. - Dominion Energy aims to increase its renewable energy capacity by over 15% annually through 2036, focusing on battery storage, solar, hydro, and wind projects [12]. Customer Growth and Demand - The company is witnessing strong customer growth in Virginia and South Carolina, supported by utility rates that are lower than the national average [13]. - Rising demand from data centers has driven commercial load growth, with the company adding an average of 15 data centers annually since 2013 [14]. Infrastructure Resilience - Dominion Energy is undertaking a $2 billion initiative to underground 4,000 miles of overhead distribution lines, significantly reducing outage durations for affected customers [15]. Earnings Estimates - The Zacks Consensus Estimate for Dominion Energy's 2026 earnings per share indicates a year-over-year increase of 5.93%, with long-term earnings growth projected at 10.26% [16]. Dividend and Financial Health - The company has a current annual dividend of $2.67, yielding 4.51%, which is higher than the industry average of 2.92% [20]. - Dominion Energy's debt to capital ratio stands at 60.48%, lower than the industry average of 61.13%, indicating prudent debt management [23]. Valuation - Dominion Energy is currently valued at a premium compared to its industry peers on a forward 12-month price-to-earnings (P/E) basis [25].

Core Viewpoint - Dominion Energy, Inc. emphasizes the critical importance of the Coastal Virginia Offshore Wind Project for national security and energy reliability in Virginia, which has the fastest rising energy demand in the U.S. [2][3] Group 1: Project Importance - The Coastal Virginia Offshore Wind Project is deemed essential for meeting the increasing energy demands of significant entities, including the largest warship manufacturer and numerous data centers [2][3] - The company argues that halting the project could jeopardize thousands of jobs, lead to energy inflation, and threaten grid reliability for military, AI, and civilian systems [3] Group 2: Project Development and Oversight - The project has been under development for over ten years and is located 27 to 44 miles offshore, with a close partnership with military operations [3] - Dominion Energy asserts that its cyber and physical security systems are monitored by state and federal officials, ensuring compliance and safety [3] Group 3: Investment Perspective - While Dominion Energy is recognized as a potential investment, there are suggestions that certain AI stocks may offer greater upside potential with less downside risk [4]

Core Viewpoint - The utility sector is poised to benefit significantly from the AI data center boom, with companies like NextEra Energy and Dominion Energy leading the charge in expanding their power generation capacity to meet increasing demand [4][12]. Group 1: NextEra Energy - NextEra Energy Resources is expected to gain from the AI power boom, focusing on clean energy infrastructure and maintaining a strategic partnership with Google for nuclear energy development [1]. - The company anticipates an adjusted earnings per share growth of over 8% annually for the next decade, alongside a commitment to increasing its dividend yield of 2.8% [1]. Group 2: Florida's Position - Florida is strategically positioned to benefit from the AI data center boom, supported by a state sales tax exemption for data centers exceeding 100 megawatts and the first approved large load tariff by Florida Power & Light (FPL) [2]. Group 3: Dominion Energy - Dominion Energy serves 3.6 million customers and is set to benefit from a 17% increase in power requests for data centers, totaling 47.1 gigawatts (GW) [6]. - The company plans to invest $50 billion from 2025 to 2029, with significant funding allocated to the $11.2 billion Coastal Virginia Offshore Wind project, expected to be completed in 2026 [7]. - Dominion Energy projects a long-term earnings-per-share growth of 5% to 7% and aims to maintain a dividend yield of 4.5% [8]. Group 4: Entergy - Entergy provides electricity to 3 million customers and anticipates a surge in power demand driven by a 13% to 14% compound annual growth rate from industrial customers, including data centers [9]. - The company is investing $41 billion between 2026 and 2029 to enhance its power generation capacity, including new gas-fired power plants to support a $10 billion AI data center for Meta Platforms [10][11]. - Entergy expects to achieve over 8% compound annual earnings-per-share growth through 2029, while maintaining a dividend yield of 2.8% [11]. Group 5: Total Return Potential - Utilities are expected to experience brisk earnings growth as they invest heavily to meet the rising power demand from AI data centers, potentially leading to strong total returns for investors [12].

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Industry Overview - The US electricity demand increased in 2025, driven by industrial electrification, AI workloads, and transportation, with peak demand expected to grow by 26% by 2035 [2] - Industrial electrification may add 25 GW by 2030, while data center usage could reach 176 GW, a fivefold increase from 2024 [2] - 93% of new capacity through July 2025 will be renewable, but supply expansion is slow, with 2 terawatts trapped in interconnection lines [2] - Reliability issues are escalating, with 15 natural disasters in H1 2025 causing over $1 billion in damages, and residential retail prices predicted to rise by 4.5% from 2024 [2] Company Insights - Ameren Corporation (NYSE:AEE) reported a TTM net income of $1.41 billion and a net income margin of 16.34%, with 34 hedge fund holders [9] - Dominion Energy, Inc. (NYSE:D) reported a TTM net income of $2.61 billion and a net income margin of 16.79%, with 35 hedge fund holders [13] - Ameren Corporation revised its long-term EPS growth guidance to a compound annual rate of 6% to 8% from 2025 through 2029, with a 2025 estimate midpoint of $4.95 [11] - Dominion Energy emphasized the importance of the Coastal Virginia Offshore Wind Project for national security and energy demand, stating it is critical for providing reliable electricity to key sectors [14][15]

Industry Overview - Companies in the Zacks Utility – Electric Power industry present an attractive investment case due to stable cash flows and predictable earnings supported by regulated business models [1] - Long-term power purchase agreements help shield many U.S. utilities from economic volatility, while growing electricity demand from AI-driven data centers, electric vehicle adoption, and reshoring manufacturing creates new growth opportunities [1] Company Analysis: Dominion Energy - Dominion Energy offers a strong long-term investment case due to its regulated model, stable cash flows, and reliable dividends, positioning it well for income-focused investors [3] - The company is investing $50 billion in capital expenditures from 2025 to 2029 to strengthen its operations, which is significantly higher than Vistra's $2.2 billion annual investment plan [12] - Dominion's earnings per share (EPS) estimates for 2025 and 2026 increased year over year by 22.74% and 5.93%, respectively, with long-term earnings growth pegged at 10.26% [8] - Dominion has a dividend yield of 4.51% and a lower debt-to-capital ratio of 57.71%, making it financially healthier compared to Vistra [9][15] Company Analysis: Vistra Corp. - Vistra Corp. is attractive due to a balanced mix of natural gas, nuclear, solar, and battery storage assets, providing strong cash flow visibility and disciplined capital allocation [4] - The Zacks Consensus Estimate for Vistra's EPS in 2025 decreased by 26.29% but is projected to increase by 62.33% in 2026, with long-term earnings growth pegged at 11.67% [5][8] - Vistra's current dividend yield is 0.56%, significantly lower than Dominion's, and it has a higher debt-to-capital ratio of 75.11% [11][15] Valuation and Performance - Dominion is currently trading at a forward P/E of 16.39X, which is cheaper compared to Vistra's 19.42X and the industry's average of 14.65X [16][18] - Over the past six months, Dominion's shares have gained 4.8%, while Vistra's shares have declined by 11.9%, with the sector returning 7.6% [19] Conclusion - Overall, Dominion is in a better position compared to Vistra due to stable earnings growth, better dividend yield, elaborate capital expenditure plan, lower debt usage, and cheaper valuation [24] - Dominion currently holds a Zacks Rank 2 (Buy), while Vistra carries a Zacks Rank 3 (Hold), indicating a stronger investment case for Dominion [25]