Dominion Energy (NYSE:D) and Ameren (NYSE:AEE) Critical Survey

Dominion Energy (NYSE:D) and Ameren (NYSE:AEE) are both large-cap utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Valuation and Earnings

This table compares Dominion Energy and Ameren”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dominion Energy	$14.46 billion	3.59	$2.12 billion	$2.94	20.65
Ameren	$7.62 billion	3.68	$1.18 billion	$5.20	19.92

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Dominion Energy	16.17%	9.60%	2.69%
Ameren	15.75%	10.92%	2.96%

Analyst Recommendations

This is a summary of recent ratings for Dominion Energy and Ameren, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dominion Energy	1	9	2	0	2.08
Ameren	1	6	5	1	2.46

Dominion Energy presently has a consensus target price of $64.33, suggesting a potential upside of 5.96%. Ameren has a consensus target price of $109.60, suggesting a potential upside of 5.81%. Given Dominion Energy’s higher probable upside, equities analysts clearly believe Dominion Energy is more favorable than Ameren.

Insider and Institutional Ownership

73.0% of Dominion Energy shares are owned by institutional investors. Comparatively, 79.1% of Ameren shares are owned by institutional investors. 0.1% of Dominion Energy shares are owned by insiders. Comparatively, 0.3% of Ameren shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Dominion Energy has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, Ameren has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500.

Dividends

Dominion Energy pays an annual dividend of $2.67 per share and has a dividend yield of 4.4%. Ameren pays an annual dividend of $2.84 per share and has a dividend yield of 2.7%. Dominion Energy pays out 90.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ameren pays out 54.6% of its earnings in the form of a dividend. Ameren has raised its dividend for 12 consecutive years.

Summary

Ameren beats Dominion Energy on 11 of the 18 factors compared between the two stocks.

About Dominion Energy

Dominion Energy, Inc. produces and distributes energy in the United States. It operates through three operating segments: Dominion Energy Virginia, Dominion Energy South Carolina, and Contracted Energy. The Dominion Energy Virginia segment generates, transmits, and distributes regulated electricity to approximately 2.8 million residential, commercial, industrial, and governmental customers in Virginia and North Carolina. The Dominion Energy South Carolina segment generates, transmits, and distributes electricity to approximately 0.8 million customers in the central, southern, and southwestern portions of South Carolina; and distributes natural gas to approximately 0.4 million residential, commercial, and industrial customers in South Carolina. The Contracted Energy segment is involved in the nonregulated long-term contracted renewable electric generation and renewable natural gas facility. As of December 31, 2023, the company's portfolio of assets included approximately 29.5 gigawatt of electric generating capacity; 10,600 miles of electric transmission lines; 79,300 miles of electric distribution lines; and 94,800 miles of gas distribution mains and related service facilities. The company was formerly known as Dominion Resources, Inc. Dominion Energy, Inc. was incorporated in 1983 and is headquartered in Richmond, Virginia.

About Ameren

Ameren Corporation, together with its subsidiaries, operates as a public utility holding company in the United States. The company operates through four segments: Ameren Missouri, Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Transmission. It engages in the rate-regulated electric generation, transmission, and distribution activities; and rate-regulated natural gas distribution business. In addition, the company generates electricity through coal, nuclear, and natural gas, as well as renewable sources, such as hydroelectric, wind, methane gas, and solar. It serves residential, commercial, and industrial customers. The company was founded in 1881 and is headquartered in Saint Louis, Missouri.