NEE vs. D: Which Utility Giant Now Has More Growth Potential?

Dominion Energy D and NextEra Energy NEE are among the top-tier utility companies in the United States. Both companies are investing heavily to upgrade their infrastructure and expand their renewable energy portfolios. NextEra Energy and Dominion Energy’s ongoing efforts to modernize their systems are boosting grid resilience and helping maintain reliable power delivery during severe weather conditions. In addition, each company is pursuing strategic acquisitions to broaden its renewable footprint and strengthen market presence. By advancing cleaner power generation and reducing emissions, NEE and D are contributing meaningfully to the transformation of the U.S. energy sector.

NextEra Energy stands out as a leading U.S. utility with a strong reputation for renewable energy leadership and sustainable expansion. With substantial investments in wind, solar, battery storage and grid modernization, the company is at the forefront of the clean energy transition. As the parent of Florida Power & Light and NextEra Energy Resources, NEE oversees one of the world’s largest wind and solar portfolios. Supported by solid financial performance and a long history of innovation, the company provides investors with both stability and long-term growth potential aligned with the accelerating shift toward green energy.

Dominion Energy remains committed to running its current nuclear fleet while also exploring the promise of next-generation nuclear technologies. In 2024, the company signed a Memorandum of Understanding with Amazon to evaluate innovative development approaches that could support potential Small Modular Reactor projects in Virginia. Dominion Energy has a well-chalked-out long-term capital expenditure plan to strengthen and expand its infrastructure. The company is experiencing commercial load growth driven by data center demand. Attractive customer growth across the Virginia and South Carolina areas is also boosting demand for its services.

Amid the ongoing transition in the United States utilities space and increasing focus on the generation of clean electricity, let us focus on the two stocks' fundamentals to find out which one is a better investment pick at present.

D & NEE’s Earnings Estimates

The Zacks Consensus Estimate for Dominion Energy’s earnings per share for 2025 and 2026 increased 0.29% and 0.28%, respectively, in the past 60 days. Long-term (three to five years) earnings growth per share is pegged at 10.26%.

The Zacks Consensus Estimate for NextEra Energy’s earnings per share in 2025 and 2026 has remained unchanged in the past 60 days. Long-term earnings growth per share is pegged at 8.08%.

D and NEE’s Return on Equity

Return on equity (“ROE”) measures how efficiently the company is utilizing its shareholders’ funds to generate profits. NextEra Energy’s current ROE is 12.42% compared with Dominion Energy’s 9.6%.

NEE & D’s Dividend Yield

Utility companies generally distribute dividends and increase shareholders’ value. Currently, the dividend yield for NextEra Energy is 2.71% compared with the Zacks S&P 500 composite’s average of 1.52%, and the same for Dominion Energy is 4.34%.

NEE & D’s Long-Term Strategic Investment Plans

Capital expenditure is critical in the sector, as it drives infrastructure development, system reliability and long-term growth. Utilities must consistently invest in power generation, transmission and distribution networks to meet rising demand, integrate renewable energy sources and comply with evolving regulatory standards. The current interest rate in the range of 3.75% to 4% will also assist the capital-intensive utilities.

NextEra Energy plans to invest nearly $74.6 billion in the 2025-2029 period to strengthen its infrastructure and add more clean electricity generation assets. Dominion Energy plans to invest $50 billion in the 2025-2029 period to further strengthen its renewable operations.

Valuation

NextEra Energy currently appears to be trading at a premium compared with Dominion Energy on a Price/Earnings Forward 12-month basis. (P/E- F12M).

NEE is currently trading at 21.19X, while D is trading at 17.17X compared with the industry’s 15.16X.

Price Performance

Last month, Dominion Energy’s shares have gained 1.1% against NextEra Energy’s decline of 3%.

Summing Up

Dominion Energy and NextEra Energy are investing heavily in their infrastructure to serve millions of customers across the United States.

Based on the above discussion, Dominion Energy currently has a marginal edge over NextEra Energy. Dominion Energy’s price performance, stronger dividend yield, better movement in earnings estimates and cheaper valuation make it attractive compared with NextEra Energy.

Considering the aforementioned factors, Dominion Energy is currently our choice with a Zacks Rank #2 (Buy), while NextEra Energy carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
 

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This article originally published on Zacks Investment Research (zacks.com).

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