Short Report on Dominion Energy Stock

Now trading at a price of $47.12, Dominion Energy has moved 0.3% so far today.

Dominion Energy returned losses of -21.0% last year, with its stock price reaching a high of $63.94 and a low of $39.18. Over the same period, the stock underperformed the S&P 500 index by -34.0%. As of April 2023, the company's 50-day average price was $43.82. Dominion Energy, Inc. produces and distributes energy in the United States. Based in Richmond, VA, the large-cap Utilities company has 17,200 full time employees. Dominion Energy has offered a 5.7% dividend yield over the last 12 months.

The Company Has a Highly Leveraged Balance Sheet and a Declining EPS Growth Trend:

2018 2019 2020 2021 2022 2023
Revenue (MM) $11,199 $14,401 $11,919 $11,420 $13,945 $14,669
Gross Margins 27% 11% 12% 20% 6% 16%
Operating Margins 28% 12% 12% 20% 6% 16%
Net Margins 23% 10% 9% 28% 7% 12%
Net Income (MM) $2,549 $1,376 $1,039 $3,314 $994 $1,717
Net Interest Expense (MM) $1,279 $1,486 $1,339 $1,255 $1,002 $1,395
Depreciation & Amort. (MM) $1,660 $2,283 $1,991 $2,103 $2,442 $2,494
Earnings Per Share $3.74 $1.62 -$0.57 $3.98 $1.09 $1.96
Diluted Shares (MM) 655 809 831 808 824 869
Free Cash Flow (MM) $519 $224 $247 $2,575 $3,700 $6,215
Net Current Assets (MM) -$50,705 -$63,694 -$62,558 -$63,403 -$66,512 -$53,236
Long Term Debt (MM) $31,144 $28,998 $33,957 $33,847 $34,584 $33,057
Net Debt / EBITDA 6.8 7.57 10.87 8.33 12.86 10.52

Dominion Energy has slimmer gross margins than its peers, declining EPS growth, and a highly leveraged balance sheet. On the other hand, the company benefits from growing revenues and no capital expenditures and a pattern of improving cash flows. Furthermore, Dominion Energy has average net margins with a negative growth trend.

A Very Low P/E Ratio but Trades Above Its Graham Number:

Dominion Energy has a trailing twelve month P/E ratio of 14.6, compared to an average of 22.89 for the Utilities sector. Based on its EPS guidance of $3.15, the company has a forward P/E ratio of 13.9. The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is -10.2%. On this basis, the company's PEG ratio is -1.43, which indicates that its shares are overpriced. Furthermore, Dominion Energy is likely overvalued compared to the book value of its equity, since its P/B ratio of 1.5 is higher than the sector average of 1.03. The company's shares are currently trading 24.9% above their Graham number.

Dominion Energy Has an Average Rating of Hold:

The 13 analysts following Dominion Energy have set target prices ranging from $44.0 to $61.0 per share, for an average of $49.38 with a hold rating. As of April 2023, the company is trading -11.3% away from its average target price, indicating that there is an analyst consensus of some upside potential.

Dominion Energy has a very low short interest because 1.1% of the company's shares are sold short. Institutions own 72.1% of the company's shares, and the insider ownership rate stands at 0.14%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $3,586,440,537.

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.