DOMINION ENERGY, INC (D) stock intrinsic value fair value estimate & owner earnings analysis

Dominion Energy is now a regulated electric utility with a nuclear and solar contracted-energy arm attached. Dominion Energy Virginia (Virginia Electric and Power) is the core, serving Northern Virginia's data-center corridor and the rest of the state plus part of northeastern North Carolina; Dominion Energy South Carolina adds electric and gas service there. In 2024 the company sold its three gas distribution utilities (East Ohio, Questar Gas, PSNC) to Enbridge, and in October 2024 it sold half of the Coastal Virginia Offshore Wind project (CVOW) to Stonepeak. PENDING MERGER. On May 18, 2026 NextEra Energy agreed to acquire Dominion in an all-stock deal: 0.8138 NextEra shares for each Dominion share, plus a one-time cash payment totaling about $360 million. Virginia hearings begin November 17, 2026, a Virginia decision is expected in January 2027, and closing is expected in the second half of 2027, subject also to North Carolina, South Carolina, FERC, NRC and antitrust approvals. Everything below values Dominion's own business as it stands. If the deal closes, holders will own NextEra shares, whose worth depends on NextEra's business, which we have not valued here. WHAT THE RECORD SHOWS. Counting only the cash the business really keeps (cash from operations, less swings in fuel recovery, receivables and other working capital, less stock compensation, less an allowance equal to depreciation for keeping existing assets running), the company earned between $1.62 and $4.21 per share a year over 2016-2025. Because the share count rose from 617 million (2016) to 855 million (2025 average) and 880 million in the first quarter of 2026, per-share results have gone nowhere while the asset base has grown enormously. Operating cash flow fell short of plant spending by roughly $27 billion over the decade, so growth and the dividend have been funded by borrowing and new shares. The dividend ($2.67 a share, about $2.3 billion in 2025) plus about $1.8 billion of annual cash interest absorbs roughly all of the ~$4.1 billion the existing business throws off, leaving nothing for growth. HOW WE MEASURED. We value the business before its lenders, then subtract what it owes. Depreciation is treated as the cost of keeping existing assets going; spending above depreciation is new rate-base investment and is valued project by project rather than hidden in earnings. We left out tax deferrals created by heavy construction ($1.06 billion in 2025 alone), since they only exist while the company keeps building. Pension contributions and other recurring operating items were kept as real costs. On that footing the business produced $5.4 billion before lenders in 2025, $4.3 billion without the tax deferrals, and a 2019-2025 median of $4.1 billion; we use $4.1 billion as the normal level. That window is the period since the South Carolina combination. It still includes the gas utilities sold in 2024, whose share of the cash flow cannot be cleanly separated from the filings; we judged that the larger asset base since then roughly offsets them, and 2025 ($4.3 billion, a year without the gas utilities) is consistent with that. Growth path: the last completed year (2025) showed $4.21 per share against $1.62 in 2024; our base case starts at the normal level with zero growth, below that recent pace, and credits no growth from data-center demand, rate cases or new plans, because none of it is secured. What is credited is plant already under construction: $19.2 billion at year-end 2025, of which CVOW was $8.6 billion. BASE CASE: about $43.48 per share. Existing operations $4.1 billion a year, worth about $68.3 billion. Dominion's half of CVOW is worth about $5.0 billion: a 2.6 GW project, majority in service by end-2026, the rest in early 2027, total cost about $11.5 billion, with returns set by the Virginia Commission's Rider OSW approval at an allowed return of about 9.8%. Cost sharing means only $10.8 billion is recoverable ($721 million of cost already booked as not recoverable). Other plant under construction ($10.6 billion) is credited at cost. Total about $84.0 billion. Owes about $45.7 billion: $48.9 billion of borrowings, less $4.2 billion because the long-dated debt carries an average coupon near 4.8% (cheaper than new borrowing; the $6.0 billion of junior subordinated notes at about 6.5% is the exception), plus $1.0 billion of preferred stock. Difference about $38.3 billion, or $43.48 on 880.1 million shares. Debt maturities are modest: $2.3 billion due 2026, $2.0 billion 2027, $2.5 billion 2028, $0.7 billion 2029, $2.5 billion 2030, $36.4 billion after. BEAR CASE: about $27.16. Named risks: (1) CVOW overruns. Recent updates each added hundreds of millions ($0.6 billion onshore and network upgrades and $0.3 billion contingency since the November 2024 filing, $0.6 billion tariffs, $0.2 billion from the December 2025 stop-work order), and the Commission's cost-sharing recovers nothing above $11.3 billion. We assume a further $1.5 billion overrun, with the allowed return trimmed to 9.0% (the Commission can move it by 50 basis points, and a 2027 review is coming). (2) Capital destruction: the 2020 cancellation of the Atlantic Coast Pipeline cost the company billions, and South Carolina has produced customer refunds and rate credits; we assume 15% of other plant under construction is never recovered. (3) Normal cash flow of $3.4 billion, in line with the weaker years (2021 $3.4 billion, 2024 $3.5 billion; 2023 fell to $2.8 billion). Data centers are 28% of Virginia sales, so a stall in that demand would load fixed costs onto fewer customers. Worth about $69.6 billion; owes the same $45.7 billion; difference $23.9 billion. The business still covers its roughly $1.8 billion interest bill. BULL CASE: about $51.63. Existing operations at $4.4 billion (just above the best year, 2025 at $4.3 billion), CVOW finishing on time and on budget with financing costs recovered (Dominion's half worth about $5.6 billion), and other construction earning the allowed return, worth about $12.2 billion. Worth $91.1 billion; owes $45.7 billion; difference $45.4 billion. A requirement in the Virginia Commission's 2025 order, that new large data-center customers sign 14-year contracts with minimum demand from January 2027, is real but not yet producing revenue, so no growth is credited for it. Rate-sharing rules (85% of earnings up to 150 basis points over the allowed return go to customers) cap the upside. WHAT COULD MAKE THIS WRONG. Each 10% error in the normal cash flow moves value by about $7.80 a share because of the leverage. The first-quarter 2026 report showed net income of $621 million versus $665 million a year earlier and 3% more shares; later quarters were not available to us. Prior-year taxes on nuclear decommissioning trusts were revised in the 2025 filing; cash flow was unaffected. Earlier estimates (about $33, $55, $78) used a different basis and are not comparable. MARGIN-OF-SAFETY PRICE: $25.00. We are fairly sure of the earnings level because ten years of cash records exist, but 2024 and 2023 show how far it can fall. The worst plausible event is another large construction write-off combined with a regulator trimming allowed returns, with $48.9 billion of debt ahead of shareholders; the debt is long-dated and mostly fixed, so survival is not the issue but the equity is a thin slice. If we are wrong on both the normal level and construction recovery (the bear case plus another 15% of construction never recovered), shares would be worth about $25. The price assumes a four-to-five-year holding period; the $2.67 dividend equals about 10.7% a year of $25 and is roughly covered by existing cash flow. From $25, the base case implies about 20% a year if the base value is reached in five years, and the bear case implies around 12% a year with dividends. The price applies only if Dominion remains independent (see trigger).