Why Dominion Energy Stock Edged Higher Today

Some investors were energized by Dominion Energy's (NYSE: D) latest earnings report, which was published before market open on Thursday. The lightly positive reaction to the gas and electric utility company's performance boosted its stock price, which closed the day nearly 1% higher. That was lofty enough to beat the 0.6% increase of the S&P 500 index.

Double-digit bounces

In Dominion's first quarter, the company earned just under $4.08 billion in revenue for a satisfying 12% improvement year over year. The company's "operating earnings" (i.e., non-GAAP or adjusted net income) swelled to $803 million, or $0.93 per share, from the year-ago profit of $485 million.

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Compounding those solid growth figures, both line items topped analyst estimates, particularly on the bottom line. The consensus prognosticator expectation for revenue was $3.78 billion and $0.77 per share for adjusted net income.

Much of the growth came from customers in Dominion's core electricity markets of Virginia and South Carolina. The former state contains the largest cluster of data centers, the facilities that house back-end computing infrastructure. The rapid rise and intense demand for resource-intensive artificial intelligence (AI) functionalities has produced an accompanying need for more electrical power.

A powerful future

In Dominion's earnings release, the company reaffirmed its existing bottom-line guidance for full-year 2025 and beyond. It's expecting to book $3.28 to $3.52 per share in operating earnings, a tally that should rise by 5% to 7% each year through 2029.

It also said it anticipates keeping its current $2.67 per share in annual dividend payments level "until such time as we achieve a utility industry-aligned payout ratio," as CFO Steven Ridge said in the Q4 earnings call detailing the guidance.

Dominion feels like the right provider at the right time and in the right region. AI will be a durably hot technology, and its power needs will only grow. This is a good stock to own just now.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Dominion Energy. The Motley Fool has a disclosure policy.