Quick Update for D Investors

It hasn't been a great afternoon session for Dominion Energy investors, who have watched their shares sink by -1.1% to a price of $52.5. Some of you might be wondering if it's time to buy the dip. If you are considering this, make sure to check the company's fundamentals first to determine if the shares are fairly valued at today's prices.

Dominion Energy's Valuation Is in Line With Its Sector Averages:

Dominion Energy, Inc. produces and distributes energy in the United States. The company belongs to the Utilities sector, which has an average price to earnings (P/E) ratio of 22.89 and an average price to book (P/B) ratio of 1.03. In contrast, Dominion Energy has a trailing 12 month P/E ratio of 36.5 and a P/B ratio of 1.65.

Dominion Energy's PEG ratio is 1.54, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.

Increasing Revenues but Narrowing Margins:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $16,572 $14,172 $13,964 $17,174
Gross Margins 72.5% 77.5% 74.8% 68.8%
Operating Margins 15.9% 14.5% 21.6% 9.3%
Net Margins 8.74% -2.83% 23.55% 5.79%
Net Income (MM) $1,448 -$401 $3,288 $994
Net Interest Expense (MM) -1,773 -1,377 -1,354 -966
Net Interest Expense (MM) -$1,773 -$1,377 -$1,354 -$966
Depreciation & Amort. (MM) -$2,977 -$2,836 -$2,768 -$3,113
Earnings Per Share $1.73 -$0.57 $3.98 $1.44
EPS Growth n/a -132.95% 798.25% -63.82%
Diluted Shares (MM) 838 831 810 836
Free Cash Flow (MM) $224 -$793 -$1,923 -$3,891
Capital Expenditures (MM) -$4,980 -$6,020 -$5,960 -$7,591
Net Current Assets (MM) -$63,702 -$62,558 -$65,013 -$66,512
Current Ratio 0.61 0.64 0.84 0.73
Long Term Debt (MM) $33,719 $33,957 $37,426 $38,914
Net Debt / EBITDA 5.72 9.46 5.14 8.86

Dominion Energy has declining EPS growth, negative and highly variable cash flows, and a highly leveraged balance sheet. On the other hand, the company benefits from stable revenues and increasing reinvestment in the business and wider gross margins than its peer group. Furthermore, Dominion Energy has average net margins with a negative growth trend.

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.