Dominion Energy Inc's Dividend Analysis
Assessing the Dividend Sustainability of Dominion Energy Inc
Dominion Energy Inc (NYSE:D) recently announced a dividend of $0.67 per share, payable on 2024-03-20, with the ex-dividend date set for 2024-02-29. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Utilizing data from GuruFocus, we will delve into Dominion Energy Inc's dividend performance and evaluate its sustainability.
What Does Dominion Energy Inc Do?
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Based in Richmond, Virginia, Dominion Energy is an integrated energy company with over 30 gigawatts of electric generation capacity and more than 90,000 miles of electric transmission and distribution lines. The company is actively expanding its renewable energy portfolio, including constructing a rate-regulated 5.2 GW wind farm off the Virginia Beach coast, which represents a significant commitment to sustainable energy.
A Glimpse at Dominion Energy Inc's Dividend History
Dominion Energy Inc has a solid track record of consistent dividend payments since 1986, with dividends distributed quarterly. This history reflects the company's commitment to providing shareholders with regular income. Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down Dominion Energy Inc's Dividend Yield and Growth
Dominion Energy Inc currently has a trailing dividend yield of 5.56% and a forward dividend yield of 5.56%, indicating an expectation of consistent dividend payments over the next 12 months. However, the company's annual dividend growth rate over the past three years has been -8.20%, with a slight improvement to -6.60% per year over a five-year period. Over the past decade, the annual dividends per share growth rate stands at 1.70%.
Considering Dominion Energy Inc's dividend yield and five-year growth rate, the 5-year yield on cost for Dominion Energy Inc stock is approximately 3.95%.
The Sustainability Question: Payout Ratio and Profitability
To evaluate the sustainability of the dividend, we consider the dividend payout ratio, which is currently 0.86 for Dominion Energy Inc as of 2023-12-31. This high ratio may raise concerns about the dividend's sustainability. Additionally, Dominion Energy Inc's profitability rank is 7 out of 10, indicating good profitability prospects, with the company reporting net profit in 9 out of the past 10 years.
Growth Metrics: The Future Outlook
Dominion Energy Inc's growth rank of 7 suggests that the company's growth trajectory is favorable relative to its competitors. However, its revenue per share and 3-year revenue growth rate, at an average of 0.30% per year, underperforms approximately 82.72% of global competitors. The 3-year EPS growth rate also underperforms, with an average decrease of -12.80% per year, which is lower than approximately 78.06% of global competitors. Lastly, the 5-year EBITDA growth rate of -1.10% underperforms approximately 70.06% of global competitors.
Dividend Outlook and Investment Considerations
Considering Dominion Energy Inc's dividend payments, growth rate, payout ratio, and growth metrics, investors should weigh the high yield against potential sustainability concerns. The company's solid profitability rank and consistent dividend history provide some reassurance, but the negative growth rates in revenue and EPS may necessitate cautious optimism for the long-term dividend outlook. Prospective and current investors may find it beneficial to monitor the company's strategic initiatives and industry trends closely.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener to find opportunities like Dominion Energy Inc or better performers in terms of dividend sustainability.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
