Dominion Energy (NYSE: D) and Dynegy (NYSE:DYN) are both utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, risk, valuation, dividends, profitability, analyst recommendations and institutional ownership.

Dividends

Dominion Energy pays an annual dividend of $3.02 per share and has a dividend yield of 3.7%. Dynegy does not pay a dividend. Dominion Energy pays out 89.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dominion Energy has increased its dividend for 8 consecutive years.

Earnings & Valuation

This table compares Dominion Energy and Dynegy’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Dominion Energy $11.73 billion 4.42 $2.12 billion $3.39 23.80
Dynegy $4.32 billion 0.38 -$1.24 billion ($0.52) -23.79

Dominion Energy has higher revenue and earnings than Dynegy. Dynegy is trading at a lower price-to-earnings ratio than Dominion Energy, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Dominion Energy has a beta of 0.29, suggesting that its share price is 71% less volatile than the S&P 500. Comparatively, Dynegy has a beta of 1.92, suggesting that its share price is 92% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Dominion Energy and Dynegy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dominion Energy 0 11 2 0 2.15
Dynegy 0 4 5 0 2.56

Dominion Energy presently has a consensus price target of $80.11, indicating a potential downside of 0.69%. Dynegy has a consensus price target of $13.01, indicating a potential upside of 5.19%. Given Dynegy’s stronger consensus rating and higher possible upside, analysts plainly believe Dynegy is more favorable than Dominion Energy.

Institutional and Insider Ownership

64.4% of Dominion Energy shares are held by institutional investors. 0.4% of Dominion Energy shares are held by company insiders. Comparatively, 1.8% of Dynegy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Dominion Energy and Dynegy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dominion Energy 17.21% 13.32% 3.16%
Dynegy -0.22% -17.98% -2.46%

Summary

Dominion Energy beats Dynegy on 10 of the 16 factors compared between the two stocks.

About Dominion Energy

Dominion Energy, Inc., formerly Dominion Resources, Inc., is a producer and transporter of energy. Dominion is focused on its investment in regulated electric generation, transmission and distribution and regulated natural gas transmission and distribution infrastructure. It operates through three segments: Dominion Virginia Power operating segment (DVP), Dominion Generation, Dominion Energy, and Corporate and Other. The DVP segment includes regulated electric distribution and regulated electric transmission. The Dominion Generation segment includes regulated electric fleet and merchant electric fleet. The Dominion Energy segment includes gas transmission and storage, gas gathering and processing, liquefied natural gas import and storage, and nonregulated retail energy marketing. As of December 31, 2016, Dominion served utility and retail energy customers, and operated an underground natural gas storage system with approximately one trillion cubic feet of storage capacity.

About Dynegy

Dynegy Inc. (Dynegy) is a holding company and conducts the business operations through its subsidiaries. The primary business of Dynegy is the production and sale of electric energy, capacity and ancillary services from the fleet of 18 operating power plants in six states totaling approximately 12,300 megawatt (MW) of generating capacity. Dynegy sells electric energy, capacity and ancillary services on a wholesale basis from its power generation facilities. Its customers include Regional Transmission Organization (RTOs) and Independent System Operators (ISOs), integrated utilities, municipalities, electric cooperatives, transmission and distribution utilities, industrial customers, power marketers, financial participants, such as banks and hedge funds, other power generators and commercial end-users. It has three segments: Midwest segment (GEN-MW), West segment (GEN-WE) and Northeast segment (GEN-NE). Its wholly owned subsidiary is Dynegy Holdings Inc. (DHI).

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