VST vs. Dominion Energy: Which Utility Power Stock Offers More Upside?

The companies operating in the Zacks Utility – Electric Power industry offer an attractive investment case due to their stable cash flows and predictable earnings supported by regulated business models. Long-term power purchase agreements help shield many U.S. utilities from economic volatility. Growing electricity demand from AI-driven data centers, electric vehicle adoption and reshoring manufacturing are creating new growth opportunities. Ongoing investments in modern technology and infrastructure upgrades are boosting efficiency, supporting reliable earnings and steady dividend payments for shareholders.

Dominion Energy D and Vistra Corp. VST are two prominent U.S. electric utilities that are actively investing in renewable energy, making them pivotal players in the shift toward cleaner power generation. Many utility companies are actively expanding clean energy infrastructure, including solar, wind, battery storage and grid modernization. Those that adopt renewable and low-carbon technologies early are well positioned to benefit from market growth, reduce exposure to fuel cost volatility and attract increasing interest from both institutional and retail investors.

Dominion offers a strong long-term investment case due to its regulated model, stable cash flows and reliable dividends. The company’s exposure to growing electricity demand and investments in clean energy position it well for income-focused investors seeking stability and participation in the energy transition. With operations in the Mid-Atlantic and Southeastern U.S., the company is well positioned to benefit from rising electricity demand, particularly from AI-driven data centers. 

Vistra is an attractive investment due to a balanced mix of natural gas, nuclear, solar and battery storage assets, strong cash flow visibility and disciplined capital allocation. Its balanced portfolio supports reliable generation, manages volatility and positions the company for growth and consistent shareholder returns. Its efficient thermal fleet supports reliable baseload generation.

VST & D’s Earnings Growth Projections

The Zacks Consensus Estimate for Vistra’s earnings per share in 2025 decreased year over year by 26.29% and increased 62.33% in 2026. Long-term (three to five years) earnings growth per share is pegged at 11.67%.

The Zacks Consensus Estimate for Dominion’s earnings per share in 2025 and 2026 increased year over year by 22.74% and 5.93%, respectively. Long-term (three to five years) earnings growth per share is pegged at 10.26%.

D & VST’s Dividend Yield

Dividends are regular payments made by a company to its shareholders and represent a direct way for investors to earn a return on their investment. They are an important indicator of a company’s financial health and stability, often signaling strong cash flow and consistent earnings. Utilities are known for regular dividend payments to their shareholders.

Currently, the dividend yield for Dominion is 4.51%, while the same for Vistra is 0.56%.

Long-Term Capital Expenditure

Utility operations are capital intensive and the companies operating in this space need to invest regularly to upgrade, maintain and expand their infrastructure to provide reliable services to customers.

Dominion plans to invest $50 billion in the 2025-2029 period to further strengthen its operations. Vistra aims to invest $2.2 billion annually in 2025 and 2026.

Debt to Capital

Debt-to-capital ratio indicates how much debt a company is utilizing to efficiently run its operation. Utilities being a capital-intensive sector, the companies operating in the space generally have a higher percentage of debt compared with companies in other industries.

Dominion’s debt-to-capital currently stands at 57.71% compared with Vistra’s 75.11%.

 
Valuation

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

VST is currently trading at 19.42X, while D is trading at 16.39X compared with the industry’s 14.65X.

Price Performance

Dominion’s shares have gained 4.8% in the past six months against Vistra’s decline of 11.9% and the sector has returned 7.6%.

Price Performance ( Six Months)

Wrapping Up

Vistra and Dominion are producing clean energy and taking steps to add more clean energy sources to their generation portfolio to meet rising demand from customers.

Based on the above discussion, Dominion is currently in a better position compared with Vistra. Dominion’s stable earnings growth, better dividend yield, elaborate capital expenditure plan, lower percentage of debt usage and cheaper valuation make it attractive compared with Vistra.

Moreover, Dominion currently has a Zacks Rank #2 (Buy) and Vistra carries a Zacks Rank #3 (Hold). So, D is currently a better choice compared with VST, based on the aforementioned condition.

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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