May 23, 2025 a 12:07 pm
📊 Dividend Analysis - Dominion Energy, Inc.
Dominion Energy, Inc. exhibits a stable yet cautious dividend profile with a solid history of payments despite recent financial challenges. While the short-term outlook shows stress in payout ratios, its long historical track provides some reassurance. Investors should be observant of their capital structure while considering potential impacts on future dividend sustainability.
📈 Overview
Dominion Energy is a vital player in the utility sector, providing essential services with a keen focus on reliability and sustainability. Its dividend strategy, though strained recently, is notable for its longevity and relative consistency across the years.
| Financial Metric | Details |
|---|---|
| Sector | Utilities |
| Dividend yield | 4.80 % |
| Current dividend per share | 2.67 USD |
| Dividend history | 42 years |
| Last cut or suspension | None |
🗣️ Dividend History
The history of Dominion Energy's dividends is a testament to its enduring commitment to shareholders. Over four decades of uninterrupted payouts provide assurance, even as the current environment challenges its payout ratios.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.335 |
| 2024 | 2.670 |
| 2023 | 2.670 |
| 2022 | 2.670 |
| 2021 | 2.52 |
📈 Dividend Growth
Dividend growth is a critical indicator of a company’s potential to increase shareholders’ income over time. Dominion Energy's recent performance reflects a cautious growth strategy which adheres closely to market conditions and internal financial strength.
| Time | Growth |
|---|---|
| 3 years | 1.95 % |
| 5 years | -6.16 % |
The average dividend growth is -6.16 % over 5 years. This shows a challenging environment for growth in the short term but implies potential for stabilization.
⚠️ Payout Ratio
Understanding the payout ratio provides insights into dividend safety from earnings and cash flows perspectives. Dominion's payout ratios suggest a significant challenge, as dividend payments are currently unsustainable through net income or free cash flow.
| Key figure ratio | Percent |
|---|---|
| EPS-based | 156.72 % |
| Free cash flow-based | -43.45 % |
The EPS payout ratio of 156.72 % indicates dividends are extensively reliant on borrowed funds. The negative free cash flow payout ratio underscores this financial stress further, necessitating prudent fiscal strategies ahead.
💹 Cashflow & Capital Efficiency
Evaluating cash flow elements and capital efficiency enables insights into a company's ability to sustain operations and grow. Dominion's current figures indicate substantial constraints and necessitate attention to cash resource management.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | -15.89 % | -9.69 % | -7.70 % |
| Earnings Yield | 4.70 % | 5.27 % | 2.61 % |
| CAPEX to Operating Cash Flow | 224.11 % | 155.74 % | 205.16 % |
| Stock-based Compensation to Revenue | 0 % | 0.31 % | 0.26 % |
| Free Cash Flow / Operating Cash Flow Ratio | -143.08 % | -55.74 % | -105.16 % |
The negative free cash flow conversion ratios and high CAPEX highlight capital allocation stress, reflecting on operational and strategic management aspects. This necessitates a recalibration towards stabilization for long-term value preservation.
📉 Balance Sheet & Leverage Analysis
Balance sheet resilience and leverage ratios provide a succinct view of financial health. Dominion's leverage factors point towards increased borrowing risk, with financial adjustments potentially sought to maintain stability.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.532 | 1.607 | 1.638 |
| Debt-to-Assets | 0.408 | 0.406 | 0.438 |
| Debt-to-Capital | 0.605 | 0.616 | 0.621 |
| Net Debt to EBITDA | 6.50 | 6.46 | 7.14 |
| Current Ratio | 0.71 | 1.04 | 0.73 |
| Quick Ratio | 0.52 | 0.97 | 0.60 |
| Financial Leverage | 3.76 | 3.96 | 3.74 |
Dominion's leverage status poses a focus area for better managing debt load and optimizing liquidity needs, crucial for mitigating macroeconomic impact and ensuring robust financial footing.
🔍 Fundamental Strength & Profitability
Analyzing profitability metrics reveals the core financial performance. Dominion's metrics imply a competitive posture in operational margins, yet overall returns necessitate a strategic vigor to drive improved performance ratios.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 7.79 % | 7.24 % | 4.74 % |
| Return on Assets | 2.07 % | 1.83 % | 1.27 % |
| Margins: Net | 14.69 % | 13.85 % | 9.48 % |
| EBIT | 28.14 % | 25.67 % | 23.39 % |
| EBITDA | 44.06 % | 47.40 % | 45.72 % |
| Gross | 47.87 % | 48.34 % | 45.75 % |
| Research & Development to Revenue | 0 % | 0 % | 0 % |
Maintenance of high-level margins and return rates would suggest stronger market adaptability while inviting innovation and resource application improvement remains imperative.
🔍 Price Development
✅ Dividend Scoring System
| Criteria | Rating (1 to 5) | Score |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 3 | |
| Dividend growth | 2 | |
| Payout ratio | 2 | |
| Financial stability | 3 | |
| Dividend continuity | 4 | |
| Cashflow Coverage | 2 | |
| Balance Sheet Quality | 3 |
Total Score: 23/40
📝 Rating
Dominion Energy stands at a crossroads where optimizing financial policies and capital allotment is crucial. With strengths in historical dividend continuity, immediate strategic adjustments shall enhance its positioning for sustainable dividend offerings, appealing to prudent, long-term investors.