Headquartered in Virginia, Dominion Energy(NYSE: D) is a utilities giant that knows how to reward its loyal shareholders with consistent income. That's meaningful in a time when practically every market commentator expects the Federal Reserve to start cutting the federal funds rate and, by extension, Treasury bond yields in September.
It's fine to seek a government bond alternative in utility stocks, but utility companies aren't all the same. Let's see how Dominion Energy measures up when compared to the sector average, while also assessing the company's earnings track record.
How much does Dominion Energy pay in dividends?
For the past 2 1/2 years, Dominion Energy has consistently distributed quarterly dividend payments of $0.67 per share. Assuming Dominion Energy continues this pattern, the company's forward annual dividend payout would be $2.68 per share.
If the Dominion Energy share price is around $56, then the company's forward annual dividend yield would be 4.74%. This compares favorably to the utility sector's average dividend yield of around 3%. Plus, Dominion Energy pays a better yield than the 10-year U.S. Treasury Note's 3.89%.
Does Dominion Energy have a good earnings track record?
The idea isn't to just chase yield, however. Investors should also investigate Dominion Energy's bottom-line track record. As it turns out, the company is consistently profitable and usually beats Wall Street's quarterly earnings-per-share (EPS) estimates.
In 2024's second quarter, Dominion Energy posted operating (non-GAAP) earnings of $0.65 per share. Analysts had expected $0.57 per share, and the company had earned $0.35 per share in the year-earlier quarter.
In addition, Dominion Energy reaffirmed its full-year 2024 operating earnings guidance range of $2.62 to $2.87 per share. Unless an unexpected negative catalyst steers the company off course, Dominion Energy should remain a solid income generator that offers an enticing yield.
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David Moadel has no position in any of the stocks mentioned. The Motley Fool recommends Dominion Energy. The Motley Fool has a disclosure policy.
