Market Inference Overview -- D Stock

Dominion Energy logged a -1.86% change during today's afternoon session, and is now trading at a price of $52.22 per share. The S&P 500 index moved 0.28% and the Nasdaq posted a -0.06% change.

Dominion Energy shares moved -37.81% over the last 52 weeks, with a high of $85.35 and a low of $52.02. During this time, the stock lagged the S&P 500 index by -24.73%. As of January 2022, the company's 50-day average price is $58.51. Dominion Energy, Inc., commonly referred to as Dominion, is an American power and energy company headquartered in Richmond, Virginia that supplies electricity in parts of Virginia, North Carolina, and South Carolina and supplies natural gas to parts of Utah, West Virginia, Ohio, Pennsylvania, North Carolina, South Carolina, and Georgia. The large-cap Utilities company is based in Richmond, VA. Dominion Energy has returned a 4.8% dividend yield over the last 12 months.

Exceptional EPS Growth with a Highly Leveraged Balance Sheet:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $14,401 $14,172 $13,964 $17,174
Revenue Growth n/a -1.59% -1.47% 22.99%
Gross Margins 76.96% 60.56% 72.44% 64.66%
Gross Margins Growth n/a -21.31% 19.62% -10.74%
Operating Margins 10.72% 14.5% 21.62% 9.29%
Operating Margins Growth n/a 35.26% 49.1% -57.03%
Net Margins 9.43% -2.83% 23.55% 5.79%
Net Margins Growth n/a -130.01% 932.16% -75.41%
Earnings Per Share $1.62 -$0.5 $4.06 $1.19
EPS Growth n/a -130.86% 912.0% -70.69%
Diluted Shares (MM) 838 806 810 835
Free Cash Flow (MM) -$117 $5,213 -$1,923 -$3,891
FCF Growth n/a 4555.56% -136.89% -102.34%
Capital Expenditures (MM) $5,321 $14 $5,960 $7,591
Net Debt / EBITDA 7.87 16.36 6.16 11.27

Dominion Energy Is Too Expensive at Current Levels:

Compared to the Utilities sector's average of 22.89, Dominion Energy has a trailing twelve month P/E ratio of 50.7 and, according to its EPS guidance of 3.82, an expected P/E ratio of 13.67. Dominion Energy's PEG ratio is 0.29 based on its 175.2% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by Dominion Energy's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 3.89, which suggests that the company's shares are actually overvalued.

Dominion Energy's P/B ratio is 1.843 compared to its sector average of 1.03. The company is likely overvalued in terms of its net asset value. The company's shares are currently trading 39.59% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * 5-year average EPS * book value per share) = √(22.5 * 1.99 * 31.25) = $37.41

Dominion Energy Is the Subject of Mixed Market Indicators:

12 analysts are following Dominion Energy and have set target prices ranging from $52.0 to $72.0 per share. On average, they have given the company a rating of hold. At the current price of $52.22, D is trading -18.19% away from its average analyst target price of $63.83 per share, implying an analyst consensus of some upside potential for the stock.

The company has a very low short interest since 0.64% of the company's shares are tied to short positions. Institutions own 71.18% of Dominion Energy's shares, while the insider ownership rate stands at 0.13%. The biggest shareholder is the Vanguard Group, Inc. with a 9% stake in the company worth approximately $4,007,078,673.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.