There is a lot to be liked about Dominion Energy Inc (NYSE:D) as an income stock, over the past 10 years it has returned an average of 4.00% per year. The stock currently pays out a dividend yield of 4.83%, and has a market cap of US$44.37B. Let’s dig deeper into whether Dominion Energy should have a place in your portfolio. View our latest analysis for Dominion Energy

How I analyze a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

• Is it paying an annual yield above 75% of dividend payers?

• Has it paid dividend every year without dramatically reducing payout in the past?

• Has dividend per share amount increased over the past?

• Is it able to pay the current rate of dividends from its earnings?

• Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

How does Dominion Energy fare?

The company currently pays out 64.36% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Going forward, analysts expect D’s payout to increase to 87.80% of its earnings, which leads to a dividend yield of 5.21%. However, EPS is forecasted to fall to $4.09 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. In the case of D it has increased its DPS from $1.58 to $3.34 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock. Relative to peers, Dominion Energy generates a yield of 4.83%, which is on the low-side for Integrated Utilities stocks.

Next Steps:

With this in mind, I definitely rank Dominion Energy as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three key aspects you should further research:

1. Future Outlook: What are well-informed industry analysts predicting for D’s future growth? Take a look at our free research report of analyst consensus for D’s outlook.

2. Valuation: What is D worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether D is currently mispriced by the market.

3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.