Dominion Energy (D) versus Unitil (UTL) Critical Survey

Dominion Energy (NYSE: D) and Unitil (NYSE:UTL) are both utilities companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Dividends

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Dominion Energy pays an annual dividend of $3.34 per share and has a dividend yield of 5.2%. Unitil pays an annual dividend of $1.46 per share and has a dividend yield of 3.1%. Dominion Energy pays out 92.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Unitil pays out 70.9% of its earnings in the form of a dividend. Dominion Energy has increased its dividend for 9 consecutive years and Unitil has increased its dividend for 3 consecutive years. Dominion Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Dominion Energy has a beta of 0.27, suggesting that its share price is 73% less volatile than the S&P 500. Comparatively, Unitil has a beta of 0.09, suggesting that its share price is 91% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Dominion Energy 24.92% 12.67% 3.07%
Unitil 7.14% 9.38% 2.47%

Valuation and Earnings

This table compares Dominion Energy and Unitil’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dominion Energy $12.59 billion 3.32 $3.00 billion $3.60 17.80
Unitil $406.20 million 1.70 $29.00 million $2.06 22.60

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

Institutional & Insider Ownership

65.3% of Dominion Energy shares are owned by institutional investors. Comparatively, 62.4% of Unitil shares are owned by institutional investors. 0.4% of Dominion Energy shares are owned by company insiders. Comparatively, 3.4% of Unitil shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Dominion Energy and Unitil, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dominion Energy 0 10 2 0 2.17
Unitil 0 2 1 0 2.33

Dominion Energy presently has a consensus price target of $77.37, suggesting a potential upside of 20.76%. Unitil has a consensus price target of $48.67, suggesting a potential upside of 4.52%. Given Dominion Energy’s higher probable upside, equities research analysts plainly believe Dominion Energy is more favorable than Unitil.

Summary

Dominion Energy beats Unitil on 13 of the 17 factors compared between the two stocks.

Dominion Energy Company Profile

Dominion Energy, Inc. produces and transports energy in the United States. The company's Power Delivery segment engages in the regulated electric transmission and distribution operations that serve residential, commercial, industrial, and governmental customers in Virginia and North Carolina. Its Power Generation segment is involved in the electricity generation activities through gas, coal, nuclear, oil, renewables, biomass, hydro, solar, and power purchase agreements; and related energy supply operations. It also comprises generation operations of the company's merchant fleet and energy marketing, and price risk management activities for its assets. The company's Gas Infrastructure segment engages in the regulated natural gas distribution, gas transmission pipeline and storage, liquefied natural gas, and nonregulated retail natural gas marketing operations, as well as natural gas gathering and processing activities. This segment serves residential, commercial, and industrial customers. As of December 31, 2017, the company's portfolio of assets included approximately 26,000 megawatts of generating capacity; 6,600 miles of electric transmission lines; 57,900 miles of electric distribution lines; 14,800 miles of natural gas transmission, gathering, and storage pipelines; and 51,800 miles of gas distribution pipelines. It served approximately 6 million utility and retail energy customers; and operated underground natural gas storage systems with approximately 1 trillion cubic feet of storage capacity. In addition, Dominion Energy, Inc. sells electricity at wholesale prices to rural electric cooperatives, municipalities, and into wholesale electricity markets. The company was formerly known as Dominion Resources, Inc. and changed its name to Dominion Energy, Inc. in May 2017. Dominion Energy, Inc. was founded in 1909 and is headquartered in Richmond, Virginia.

Unitil Company Profile

Unitil Corporation, a public utility holding company, engages in the distribution of electricity and natural gas in the United States. It operates through three segments: Utility Gas Operations, Utility Electric Operations, and Non-Regulated. The company distributes electricity in the southeastern seacoast and state capital regions of New Hampshire, and the greater Fitchburg area of north central Massachusetts; and distributes natural gas in southeastern New Hampshire, portions of southern Maine to the Lewiston-Auburn area, and in the greater Fitchburg area of north central Massachusetts. It also operates 86 miles of interstate underground natural gas transmission pipeline that provides interstate natural gas pipeline access and transportation services primarily in Maine and New Hampshire. In addition, the company provides energy brokering and advisory services to commercial and industrial customers; and real estate management services. It serves approximately 105,000 electric customers and 81,300 natural gas customers. Unitil Corporation was incorporated in 1984 and is headquartered in Hampton, New Hampshire.

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