CEG vs. D: Which Utility Stock Is Charging Up for Stronger Gains?

Core Insights - The demand for clean electricity is sharply rising due to factors such as urbanization, industrial growth, and the increasing need for air conditioning and electric vehicles [1][2] - Nuclear energy is positioned as a reliable solution for consistent power supply, offering high-capacity factors and zero emissions, unlike solar and wind energy [2][3] Company Analysis - Constellation Energy Corporation (CEG) is the largest nuclear power plant operator in the U.S., contributing approximately 10% of the nation's clean energy production, with a nuclear fleet capacity factor of 94.1% in Q1, up from 93.3% year-over-year [4] - Dominion Energy (D) is actively exploring next-generation nuclear technologies, including a partnership with Amazon to develop Small Modular Reactors (SMRs), which offer advantages like passive safety and scalability [5] Earnings Estimates - The Zacks Consensus Estimate for Constellation Energy's earnings per share for 2025 and 2026 has increased by 0.75% and 4.54%, respectively, over the past 60 days [7] - Dominion's earnings per share estimates have remained unchanged for 2025 but decreased by 0.56% for 2026 during the same period [9] Strategic Investment Plans - Constellation Energy plans capital expenditures of nearly $3 billion and $3.5 billion for 2025 and 2026, with 35% allocated for nuclear fuel acquisition [10] - Dominion intends to invest $10.8 billion in 2025 and $50 billion from 2025 to 2029 to enhance its renewable operations [10] Financial Metrics - Constellation Energy's return on equity (ROE) stands at 21.93%, significantly higher than Dominion's 9.51% [11] - The current dividend yield for Constellation Energy is 0.52%, while Dominion's is 4.74% [12] Investment Outlook - Both CEG and D are significant players in the energy sector, with substantial investments in nuclear power, presenting growth opportunities [14] - Constellation Energy is currently favored as a better investment option with a Zacks Rank 2 (Buy), while Dominion holds a Zacks Rank 3 (Hold) [14]