CEG vs. D: Which Stock Benefits More From Rising Power Demand?

The rapid buildout of AI-driven data centers, urbanization, industrial expansion and growing electric vehicle adoption are sharply increasing demand for clean electricity.

Nuclear energy units can provide a high volume of clean energy with no emissions. Amid the rising importance of nuclear energy in the electricity generation mix, nuclear energy-related stocks like Constellation Energy Corporation CEG and Dominion Energy Inc. D are becoming attractive investment options.

With a high-capacity factor and zero emissions, nuclear energy offers a reliable solution as nations seek consistent power amid rising clean energy demand. Unlike weather-dependent solar and wind, nuclear plants provide continuous, round-the-clock electricity, supporting both growth and decarbonization goals.

Compared with other clean energy sources, nuclear power requires far less land to generate the same output and is the only conventional source that systematically manages and safely stores its waste.

Constellation Energy offers a strong investment thesis built on its leadership in clean, reliable nuclear power. CEG’s nuclear fleet delivers consistent baseload power, positioning the company to benefit from rising demand tied to data centers, electrification and decarbonization. Strategic acquisitions have expanded scale and customer reach, while ongoing capital investments support reliability and efficiency. Backed by long-term power purchase agreements and disciplined financial management, Constellation Energy generates predictable cash flows and remains well positioned for sustainable growth and long-term shareholder value.

Dominion Energy offers a strong long-term investment case supported by its emphasis on clean, reliable power and infrastructure modernization. Its nuclear fleet delivers carbon-free baseload electricity, enhancing grid stability amid rising demand, while exploration of small modular reactors (SMRs) provides optionality for scalable, cost-efficient future capacity. Continued investments in transmission and distribution upgrades are improving reliability and driving regulated rate base growth. Rapid commercial load expansion, particularly from data centers within its service areas, is further boosting electricity demand and revenue visibility.  Dominion Energy is well-positioned to benefit from electrification and data-driven demand growth.

As both companies produce a large volume of clean energy for their customers, a closer look at their fundamentals can help identify which stock presents the more compelling investment opportunity.

CEG & D’s Earnings Estimates

The Zacks Consensus Estimate for Constellation Energy’s 2026 earnings per share suggests year-over-year growth of 21.24%.

The Zacks Consensus Estimate for Dominion Energy’s 2026 earnings per share indicates year-over-year growth of 5.81%.

Return on Equity

Return on Equity (ROE) is an essential financial indicator that evaluates a company’s efficiency in generating profits from the equity invested by its shareholders. It demonstrates how well management is utilizing the capital provided to increase earnings and deliver value.

CEG’s current ROE is 21.59% compared with D’s 9.6%. 

Valuation

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

CEG is currently trading at 22.27X, while D is trading at 19.36X compared with the industry’s 16.48X.

Debt to Capital

Companies involved in utility services are capital-intensive, as large amounts of funds are required to develop, maintain, upgrade, and expand operations. The drop in the Fed rate to a range of 3.5-3.75%.
 
CEG’s debt-to-capital currently stands at 33.46% compared with D’s 60.48%. It is evident Dominion Energy utilizes a much higher percentage of debt to run its operation compared with Constellation Energy.

Price Performance

Constellation Energy’s shares have gained 5.1% in the past twelve months compared with Dominion Energy’s rally of 7%.

Price Performance (One year)

Wrapping Up

Constellation Energy is well positioned to meet rising data center demand, supported by its large nuclear capacity, efficient operations and consistent power generation.

Similarly, Dominion Energy efficiently utilizes its nuclear power to meet demand, which accounts for a significant share of its total electricity output.

Both companies are evenly matched in most of the metrics, yet better earnings estimate movement, better ROE and lower debt usage provide Constellation Energy an edge over Dominion Energy.

Considering the aforementioned factors, CEG is currently our choice with a Zacks Rank #3 (Hold), while D carries a Zacks Rank #4 (Sell).

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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