Dominion Energy

Methodology

Dominion Energy's regulated utility model generates highly predictable earnings tied to allowed returns on rate base investments, making fair value calculations straightforward. The electric and gas utility operations provide stable cash flows with minimal commodity exposure. Fair value works well when accounting for low-single-digit earnings growth from infrastructure investments and rate base expansion.

Methodology

Dominion typically trades at PEG ratios between 1.5-2.5x, reflecting utility sector valuations that balance predictable earnings with limited growth potential. The company's shift away from fossil fuel generation toward renewable investments supports earnings stability. PEG works reasonably well though utilities trade more on dividend yields than earnings multiples.

Methodology

Dominion pays a substantial dividend yielding 4-5% that drives total return for this defensive utility stock, making PEGY critical for valuation. The regulated business model ensures dividend sustainability and modest growth over time. Total return for utilities relies heavily on yield component, with PEGY providing more complete picture than growth-focused PEG alone.