Home > Comparison > Utilities > NEE vs D
The strategic rivalry between NextEra Energy, Inc. and Dominion Energy, Inc. defines the current trajectory of the regulated electric utilities sector. NextEra operates as a clean energy innovator with a focus on renewable generation and battery storage, while Dominion balances regulated electricity and natural gas distribution with contracted renewable assets. This analysis explores their contrasting operational models to determine which offers superior risk-adjusted returns for a diversified portfolio amid evolving energy markets.
Table of contents
Companies Overview
NextEra Energy and Dominion Energy stand as major players in the regulated electric utilities sector, shaping energy markets across the US.
NextEra Energy, Inc.: Clean Energy Powerhouse
NextEra Energy dominates as a leading generator of renewable and traditional electricity in North America. It earns revenue by producing and selling electric power via wind, solar, nuclear, coal, and natural gas. In 2021, its strategic focus emphasized expanding long-term contracted clean energy assets including battery storage and transmission infrastructure, serving about 11M people primarily in Florida’s east and west coasts.
Dominion Energy, Inc.: Integrated Energy Provider
Dominion Energy operates as a diverse energy producer and distributor with a strong presence in both electric and natural gas markets. It generates revenue through regulated electricity sales and natural gas distribution across multiple states, including Virginia and South Carolina. Its 2021 strategy prioritized managing a vast portfolio of electric generation, gas pipelines, and nonregulated renewable projects while serving over 6M customers across several geographic segments.
Strategic Collision: Similarities & Divergences
Both companies rely on regulated electric infrastructure but diverge in business models: NextEra leans into a clean energy growth mandate, while Dominion balances electric and gas operations with a broader geographic footprint. Their primary competition centers on capturing expanding clean energy demand and infrastructure modernization. Investors should note NextEra’s focus on renewables contrasts with Dominion’s mixed utility portfolio, defining distinct risk and growth profiles.
Income Statement Comparison
The following data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | NextEra Energy, Inc. (NEE) | Dominion Energy, Inc. (D) |
|---|---|---|
| Revenue | 27.48B | 14.46B |
| Cost of Revenue | 10.22B | 7.54B |
| Operating Expenses | 8.98B | 3.68B |
| Gross Profit | 17.26B | 6.92B |
| EBITDA | 16.17B | 6.71B |
| EBIT | 9.10B | 4.07B |
| Interest Expense | 4.57B | 1.89B |
| Net Income | 6.83B | 2.05B |
| EPS | 3.31 | 2.44 |
| Fiscal Year | 2025 | 2024 |
Income Statement Analysis: The Bottom-Line Duel
This income statement comparison reveals which company converts revenue into profit more efficiently in a dynamic market environment.
NextEra Energy, Inc. Analysis
NextEra Energy’s revenue climbed steadily from $17.1B in 2021 to $27.5B in 2025, with net income rising from $3.6B to $6.8B. Gross margins remain robust near 63%, and net margins hold strong at about 25%. Despite a slight dip in net margin and EPS in 2025, the company sustains favorable growth momentum and operating efficiency.
Dominion Energy, Inc. Analysis
Dominion’s revenue grew modestly from $11.4B in 2021 to $14.5B in 2024, while net income surged from $3.4B to $2.0B, reflecting volatility from discontinued operations. Gross margin sits at 48%, with net margin at 15%. The firm shows improving EBIT and net margin in 2024, but revenue growth remains sluggish, signaling mixed operational momentum.
Verdict: Margin Strength vs. Earnings Stability
NextEra Energy demonstrates superior revenue scale and margin power, delivering consistent profit growth and high operational efficiency. Dominion Energy posts strong net income growth over the longer term but struggles with revenue momentum and margin compression. For investors prioritizing stable earnings and margin resilience, NextEra offers a more attractive fundamental profile.
Financial Ratios Comparison
These vital ratios act as a diagnostic tool to expose underlying fiscal health, valuation premiums, and capital efficiency for these two utilities companies:
| Ratios | NextEra Energy, Inc. (NEE) | Dominion Energy, Inc. (D) |
|---|---|---|
| ROE | 13.86% | 7.79% |
| ROIC | 4.04% | 2.86% |
| P/E | 21.2 | 21.3 |
| P/B | 2.94 | 1.66 |
| Current Ratio | 0.47 | 0.71 |
| Quick Ratio | 0.38 | 0.52 |
| D/E | 1.64 | 1.53 |
| Debt-to-Assets | 43.3% | 40.8% |
| Interest Coverage | 3.35 | 1.72 |
| Asset Turnover | 0.13 | 0.14 |
| Fixed Asset Turnover | 0.18 | 0.21 |
| Payout Ratio | 61.0% | 105.4% |
| Dividend Yield | 2.87% | 4.95% |
| Fiscal Year | 2024 | 2024 |
Efficiency & Valuation Duel: The Vital Signs
Financial ratios act as a company’s DNA, unveiling hidden risks and signaling operational excellence critical for investment decisions.
NextEra Energy, Inc.
NextEra Energy shows a solid 13.9% ROE with a strong 28.1% net margin, signaling profitable operations. Its P/E of 21.2 and P/B of 2.94 mark a fairly valued stock. The 2.87% dividend yield rewards shareholders, balancing moderate profitability with steady cash returns despite some liquidity concerns.
Dominion Energy, Inc.
Dominion Energy posts a lower 7.8% ROE and a 14.7% net margin, reflecting weaker profitability. The stock trades at a similar P/E of 21.3 but a cheaper P/B of 1.66, suggesting better valuation relative to assets. With a 4.95% dividend yield, it offers strong income despite challenges in operational efficiency and liquidity.
Dividend Yield Strength vs. Profitability Edge
NextEra Energy delivers better profitability and efficiency, while Dominion Energy offers a higher dividend yield with more asset-based valuation appeal. Investors prioritizing income may prefer Dominion’s profile. Those focused on operational strength and growth should lean toward NextEra’s balanced fundamentals.
Which one offers the Superior Shareholder Reward?
NextEra Energy (NEE) delivers a balanced distribution approach with a 2.87% dividend yield and a moderate 61% payout ratio, supported by steady free cash flow of 2.3B. Its buyback program is cautious but consistent, sustaining long-term value. Dominion Energy (D) offers a higher 4.95% yield but an unsustainable payout ratio exceeding 100%, backed by negative free cash flow of -8.8B and aggressive capex. Dominion’s buybacks are limited by cash constraints. I favor NextEra’s disciplined dividend and prudent buybacks for superior total shareholder return in 2026.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and trade-offs of both firms, highlighting their financial strengths and valuation nuances:
NextEra Energy (NEE) shows a strong operational efficiency with high ROE and ROA scores (4 each) but suffers in discounted cash flow (DCF) valuation (score 1). Dominion Energy (D) presents a more balanced profile, boasting a favorable DCF score (4) and moderate profitability scores (ROE 3, ROA 3). Both share similar debt-to-equity and valuation scores (2), but Dominion’s valuation edge suggests better market pricing discipline. I see Dominion as the more balanced operator, while NextEra relies heavily on operational efficiency for its appeal.
Bankruptcy Risk: Solvency Showdown
NextEra Energy’s Altman Z-Score of 1.21 slightly outperforms Dominion Energy’s 0.71, but both remain in distress territory, signaling elevated bankruptcy risk in this cycle:
This gap highlights that although NextEra has marginally better solvency, both firms face significant financial stress. Investors must weigh this risk when considering long-term exposure.
Financial Health: Quality of Operations
Dominion Energy’s Piotroski F-Score of 7 signals stronger financial health compared to NextEra’s 6, indicating fewer internal red flags and better operational quality:
Dominion’s higher score reflects superior profitability, liquidity, and efficiency metrics. NextEra’s score, while decent, suggests room for improvement in internal financial robustness. This difference is critical for investors prioritizing sustainable quality.
How are the two companies positioned?
This section dissects the operational DNA of NextEra Energy and Dominion Energy by comparing their revenue distribution by segment and internal strengths and weaknesses. The objective is to confront their economic moats to reveal which model offers the most resilient, sustainable competitive advantage today.
Revenue Segmentation: The Strategic Mix
This comparison dissects how NextEra Energy, Inc. and Dominion Energy, Inc. diversify their income streams and where their primary sector bets lie:
NextEra Energy anchors its revenue in Florida Power & Light Company, generating $17B in 2024, with a strong second pillar from NEER at $7.5B. This mix signals a focused yet balanced play on regulated utilities and renewable resources. Dominion Energy pivots heavily on Dominion Energy Virginia, producing $10.2B, dwarfing its South Carolina segment at $3.3B and Contracted Energy at $1.1B. Dominion’s reliance on Virginia exposes it to concentration risk but also infrastructure dominance in a key market.
Strengths and Weaknesses Comparison
This table compares the Strengths and Weaknesses of NextEra Energy, Inc. and Dominion Energy, Inc.:
NextEra Energy, Inc. Strengths
- Strong net margin at 28.06%
- Favorable WACC at 6.4%
- Higher dividend yield at 2.87%
- Large Florida Power & Light segment revenue of 17B
Dominion Energy, Inc. Strengths
- Favorable net margin at 14.69%
- Lower WACC at 5.4%
- Higher dividend yield at 4.95%
- Diverse segments including Dominion Virginia and South Carolina generating over 13B
NextEra Energy, Inc. Weaknesses
- Low current ratio at 0.47 indicating liquidity risk
- Unfavorable ROIC below WACC at 4.04%
- High debt-to-equity at 1.64
- Weak asset turnover ratios
Dominion Energy, Inc. Weaknesses
- Low current ratio at 0.71 indicating liquidity pressure
- Unfavorable ROIC below WACC at 2.86%
- Debt-to-equity still elevated at 1.53
- Unfavorable asset turnover and ROE at 7.79%
NextEra demonstrates robust profitability with a large power generation base but faces liquidity and capital efficiency challenges. Dominion’s strengths lie in stable margins and dividend yield, yet liquidity and return on capital remain concerns. Both companies exhibit slightly unfavorable overall financial ratio profiles, warranting cautious capital allocation strategies.
The Moat Duel: Analyzing Competitive Defensibility
A structural moat is the only reliable shield protecting long-term profits from relentless competitive erosion in regulated utilities:
NextEra Energy, Inc. (NEE): Innovation-Driven Clean Energy Moat
NextEra’s moat stems from its scale in renewable assets and regulated transmission networks. Despite high margins, its ROIC lags WACC and declines, signaling value erosion. Future green projects could deepen barriers but require sharper capital efficiency.
Dominion Energy, Inc. (D): Diversified Utility Infrastructure Moat
Dominion leverages a broader asset base including gas and electric distribution, fueling a growing ROIC trend. Unlike NextEra, Dominion shows improving profitability, anchoring its moat with expanding regulated and contracted assets poised for incremental growth.
Capital Efficiency vs. Asset Diversification: The Moat Showdown
Both firms currently shed value relative to cost of capital, but Dominion’s rising ROIC signals a more resilient moat. I see Dominion better positioned to defend market share through operational leverage and asset diversification.
Which stock offers better returns?
The past year shows strong price gains for both NextEra Energy and Dominion Energy, with NextEra’s rally notably larger but decelerating recently, while Dominion’s advance slowed and showed slight recent weakness.
Trend Comparison
NextEra Energy’s stock soared 52.05% over the past 12 months, marking a bullish trend despite decelerating momentum. Volatility remains elevated with a 6.42% standard deviation.
Dominion Energy’s shares rose 25.35% over the same period, also bullish but with deceleration. Recent months show a slight bearish turn with a -0.64% price change and lower volatility.
NextEra Energy outperformed Dominion Energy in market returns, delivering more than double the price appreciation over the last year.
Target Prices
Analysts show a moderate upside potential for both NextEra Energy and Dominion Energy based on consensus targets.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| NextEra Energy, Inc. | 84 | 104 | 93.09 |
| Dominion Energy, Inc. | 63 | 69 | 65.86 |
NextEra’s consensus target sits about 6% above its current price of $87.9, indicating moderate appreciation potential. Dominion’s target consensus exceeds the current $60.17 price by roughly 9%, suggesting room for upside but with less margin than NextEra.
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How do institutions grade them?
The following tables summarize recent institutional grades for NextEra Energy, Inc. and Dominion Energy, Inc.:
NextEra Energy, Inc. Grades
Here are the latest grades assigned by major rating firms to NextEra Energy, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Mizuho | Maintain | Neutral | 2026-01-28 |
| Argus Research | Maintain | Buy | 2026-01-28 |
| BMO Capital | Maintain | Outperform | 2026-01-27 |
| Wells Fargo | Maintain | Overweight | 2026-01-20 |
| Barclays | Maintain | Equal Weight | 2026-01-15 |
| Jefferies | Maintain | Hold | 2025-12-31 |
| UBS | Maintain | Buy | 2025-12-17 |
| JP Morgan | Maintain | Overweight | 2025-12-11 |
| BMO Capital | Maintain | Outperform | 2025-12-10 |
| UBS | Maintain | Buy | 2025-12-10 |
Dominion Energy, Inc. Grades
Below are recent grades from leading analysts on Dominion Energy, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Barclays | Maintain | Overweight | 2026-01-22 |
| Wells Fargo | Maintain | Overweight | 2026-01-20 |
| Barclays | Maintain | Overweight | 2025-12-17 |
| JP Morgan | Maintain | Underweight | 2025-12-11 |
| BMO Capital | Maintain | Market Perform | 2025-11-03 |
| Morgan Stanley | Maintain | Equal Weight | 2025-10-22 |
| Barclays | Maintain | Overweight | 2025-10-07 |
| Morgan Stanley | Maintain | Equal Weight | 2025-09-25 |
| JP Morgan | Maintain | Underweight | 2025-08-21 |
| JP Morgan | Maintain | Underweight | 2025-07-15 |
Which company has the best grades?
NextEra Energy displays generally more positive grades, including multiple Buy and Outperform ratings, signaling stronger analyst confidence. Dominion Energy shows a mix of Overweight and Underweight ratings, implying greater uncertainty. These differences may influence investor sentiment and portfolio positioning.
Risks specific to each company
The following categories identify the critical pressure points and systemic threats facing both firms in the 2026 market environment:
1. Market & Competition
NextEra Energy, Inc.
- Dominates with 28.6GW renewable capacity, strong coastal presence; faces aggressive clean energy competition.
Dominion Energy, Inc.
- Operates 30.2GW capacity with diversified gas and electric segments; regional competition and renewables shift pressure margins.
2. Capital Structure & Debt
NextEra Energy, Inc.
- High debt-to-equity (1.64), weak interest coverage (1.99), and poor liquidity ratios signal financial strain.
Dominion Energy, Inc.
- Slightly lower debt-to-equity (1.53) and better interest coverage (2.16) but still liquidity below 1, indicating moderate risk.
3. Stock Volatility
NextEra Energy, Inc.
- Beta at 0.73 suggests moderate volatility, slightly less sensitive to market swings.
Dominion Energy, Inc.
- Beta at 0.70 shows marginally lower volatility, reflecting stable investor confidence.
4. Regulatory & Legal
NextEra Energy, Inc.
- Regulatory shifts in renewable targets may impact project approvals and costs; proactive in clean energy compliance.
Dominion Energy, Inc.
- Exposure to multi-state regulations and gas infrastructure scrutiny increases compliance complexity and legal costs.
5. Supply Chain & Operations
NextEra Energy, Inc.
- Relies heavily on renewable tech supply chains vulnerable to global disruptions; strong operational scale aids resilience.
Dominion Energy, Inc.
- Extensive gas and electric infrastructure creates operational complexity but diversified assets provide operational buffer.
6. ESG & Climate Transition
NextEra Energy, Inc.
- Leading renewable investments align with ESG trends; climate transition is core strategy reducing long-term risk.
Dominion Energy, Inc.
- Transitioning from fossil fuels but gas operations pose ESG challenges; momentum in renewable contracts mitigates risk.
7. Geopolitical Exposure
NextEra Energy, Inc.
- Primarily US-focused with minimal international geopolitical risks; regional weather events remain a concern.
Dominion Energy, Inc.
- Domestic concentration with some exposure to regulatory uncertainty in multiple states; geopolitical risk is moderate.
Which company shows a better risk-adjusted profile?
NextEra faces significant financial leverage and liquidity risks despite strong market positioning. Dominion carries operational complexity and regulatory challenges but maintains slightly better debt metrics and stronger Piotroski scores. Dominion’s diversified asset base and moderate volatility provide a more balanced risk-return profile. The most impactful risk for NextEra is its weak liquidity and interest coverage, signaling financial strain. Dominion’s challenge lies in regulatory and ESG transition pressures on gas operations. Recent ratio data reveal NextEra’s distress-zone Altman Z-score, underscoring its financial vulnerability. Overall, Dominion Energy presents a better risk-adjusted profile amid 2026 market conditions.
Final Verdict: Which stock to choose?
NextEra Energy’s superpower lies in its robust growth engine and strong income statement, fueling expansion in a competitive sector. Its point of vigilance is a concerning liquidity position, which calls for careful monitoring. It fits portfolios aiming for aggressive growth with a tolerance for financial leverage risks.
Dominion Energy’s moat centers on its stable dividend yield and defensive positioning in the energy sector. It offers a safer profile relative to NextEra, with stronger balance sheet signals despite slower growth. It suits investors seeking Growth at a Reasonable Price (GARP) with an income focus.
If you prioritize aggressive growth and can absorb liquidity challenges, NextEra Energy stands out due to its growth momentum and income strength. However, if you seek income stability with moderate growth, Dominion Energy offers better balance sheet stability and a reliable dividend. Both require vigilance given their value destruction signs, demanding careful risk assessment.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of NextEra Energy, Inc. and Dominion Energy, Inc. to enhance your investment decisions:
