Dominion Energy (D) is poised to release its second-quarter 2025 earnings on August 1, 2025, a report that will offer critical insights into the utility’s progress toward its long-term growth goals. For long-term investors, the question is whether the stock’s current valuation, coupled with its earnings momentum and industry positioning, justifies a strategic entry ahead of this key event.

Earnings Momentum: A Tale of Resilience and Execution

Dominion’s first-quarter 2025 results, released in May, underscored its ability to navigate headwinds. GAAP net income rose to $646 million ($0.75/share) from $441 million ($0.50/share) in Q1 2024, while non-GAAP operating earnings surged to $803 million ($0.93/share). This outperformance, driven by improved weather conditions, higher customer usage, and the rider equity return program, suggests the company is executing its operational playbook effectively.

The firm affirmed its 2025 operating earnings guidance of $3.28–$3.52/share, a range that implies continued confidence in its capital-intensive projects, particularly the Coastal Virginia Offshore Wind (CVOW) initiative. This 2.6-gigawatt project, now 55% complete, is a linchpin for future earnings, with expected contributions starting in 2026.

However, investors must also weigh the risks of capital overruns and regulatory delays. The company’s $50.1 billion capital plan through 2029, while ambitious, hinges on consistent execution and favorable regulatory rulings. Q2 results will be pivotal in demonstrating whether Dominion can maintain this momentum amid rising construction costs and inflationary pressures.

Valuation: A Discounted Premium in a Stable Sector

Dominion trades at a forward P/E of 18.39, slightly below the utilities sector average of 18.52, and a PEG ratio of 1.25, which, while above the sector’s 2.67, reflects its relatively modest earnings growth expectations. Analysts project 2025 EPS of $3.39, a 22% increase from 2024, suggesting the market is pricing in moderate but steady progress.

The stock’s 4.95% dividend yield is a major draw, particularly in a low-growth environment. However, the 96.57% payout ratio—among the highest in the sector—means dividends are closely tied to earnings performance. Any earnings shortfall could pressure the payout, a risk that investors must assess.

Dominion’s valuation also appears discounted relative to the S&P 500 but trades at a premium to pure-play utilities like NextEra Energy (NEE) and Duke Energy (DUK). This premium reflects its regulated earnings visibility and renewable energy growth story, though the high net debt-to-EBITDA ratio (5.99) raises concerns about interest rate sensitivity.

Industry Positioning: A Leader in the Energy Transition

Dominion’s Zacks Industry Rank of 81 places it in the top third of all industries, a testament to its strategic alignment with the energy transition. Its investments in offshore wind, solar, and battery storage position it to benefit from long-term trends in decarbonization and grid modernization. The CVOW project alone could add $0.10–$0.15/share to earnings by 2027, according to analysts.

Yet, the company’s capital-intensive model is a double-edged sword. While regulated utilities typically enjoy predictable returns, Dominion’s aggressive expansion into renewables requires sustained regulatory support and cost discipline. The firm’s ability to recover costs through rate hikes in states like Virginia and South Carolina will be critical.

Investment Implications: A Calculated Bet

Dominion Energy’s upcoming earnings report offers a timely opportunity to assess its progress. For long-term investors, the stock’s current valuation—supported by a strong dividend yield and a clear growth roadmap—appears compelling, particularly if the Q2 results confirm continued execution on the CVOW project and capital spending efficiency.

Historically, the stock has shown a mixed short-term performance around earnings releases, with a 42.86% win rate over three days, a 57.14% win rate over 10 days, and a 28.57% win rate over 30 days. This suggests volatility in the immediate aftermath of reports, though the 10-day window has historically offered the most favorable odds for positive returns. The maximum observed return over 30 days was a modest 0.24%, underscoring the limited short-term upside but reinforcing the importance of focusing on long-term fundamentals.

However, the high leverage and execution risks warrant caution. Investors should monitor the August 1 earnings call for updates on project timelines, regulatory developments, and guidance for the remainder of 2025. A positive report could validate the $58.88 average price target set by analysts, a 2.9% upside from current levels.

In conclusion, Dominion Energy offers a mix of stability and growth potential, but its success hinges on navigating execution challenges and maintaining regulatory momentum. For those with a long-term horizon and a tolerance for moderate risk, the current valuation and earnings trajectory suggest a strategic entry point ahead of the August 1 report.

“””