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A Look at Dominion Energy’s Payout Ratio

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Payout ratio

We’ll take a look at Dominion Energy’s (D) payout ratio in this part. The payout ratio shows the percentage of profit the company paid to shareholders in the form of dividends. Dominion Energy’s payout ratio was ~90% in 2017. Its five-year historical average payout ratio is close to 85%. Utilities generally give away a large portion of their earnings to shareholders.

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The higher payout ratios like Dominion’s are not rare among utilities. Duke Energy’s (DUK) payout ratio was 83% in the last fiscal year, while Southern Company’s (SO) payout ratio was 76%.

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The payout ratio of NextEra Energy (NEE), the biggest utility by market cap, was close to 53%. Utilities (XLU) stocks at large have an average payout ratio close to ~70%, notably higher than NextEra Energy. NextEra Energy’s heavy capital investments might be behind its lower payout ratio and dividend yield.

Read about top yielding utilities in Here Are the S&P 500 Utility Stocks with the Best Dividends.

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