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How Dominion Energy Stock Is Valued versus Peers

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Nov. 20 2020, Updated 3:42 p.m. ET

Valuation

Dominion Energy (D) stock currently looks attractively valued. It’s trading at a forward PE of 17.5x against its five-year historical average PE of 24x. At the same time, peers’ average PE is close to 17x. So Dominion Energy stock looks to be trading at a fairly discounted valuation compared to its historical average.

Even though Dominion Energy (D) stock has rallied 15% in the last six months, it underperformed peers in 2018. It has fallen more than 8% while utilities (XLU) at large are up about 4% so far this year.

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Peer valuation

Among the top utilities, NextEra Energy (NEE) is trading at a forward PE multiple of 22x. Southern Company (SO), the second-largest regulated utility in the country, is trading at a forward PE multiple of 15.5x, based on its estimated EPS for the next year. Duke Energy (DUK) stock is trading at a forward PE multiple of 17.5x—lower than its five-year average PE multiple.

Dominion Energy is currently trading at a dividend yield of 4.5%, higher than broader utilities’ yield. You can learn more about Dominion Energy’s historical dividend growth, payout ratio, and other dividend statistics in Comparing NextEra Energy and Dominion Energy’s Dividend Profiles.

Let’s move ahead and see where Dominion Energy stock could go from its current levels.

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