Title: Dominion's Dividend and Wind Dreams: A Data Dive into Doubt
Dominion Energy is promising a dividend of $0.6675 on December 20th, translating to a yield of 4.5%. Sounds reasonable—fairly typical for the industry, as the reports say. But let's dig a little deeper, past the press releases and into the payout ratios. Because "typical" doesn't always mean "sustainable," especially in the energy sector, where capital expenditures can make or break a company.
Cracks in the Foundation: Dividends and Debt
The problem isn't the current dividend; it's the future one. Dominion's payout ratio is already high, eating up a large chunk of their earnings. Worse, they aren't generating positive free cash flow. That's a red flag. They're essentially borrowing to pay dividends, which, as anyone who's ever maxed out a credit card knows, is a game that can't last forever. The company's projected EPS growth of 31.2% next year is promising, potentially bringing the payout ratio down to a more manageable 66%. But projections are just that—projections. They hinge on everything going according to plan, and in the energy business, things rarely do. Especially when you factor in ambitious, costly projects like offshore wind farms.
And speaking of shaky ground, Dominion's dividend history isn't exactly stellar. There's been at least one cut in the last decade. A modest annual growth of 1.1% since 2015 is hardly enough to inspire confidence, especially when that growth is punctuated by periods of retraction. Consistency is king when it comes to dividends, and Dominion's track record is more like a court jester. It's hard to plan your life around a dividend check when you're never quite sure if it's going to arrive, or how big it will be.
Dominion's also betting big on offshore wind. Their Coastal Virginia Offshore Wind (CVOW) project, spearheaded by the wind turbine installation vessel Charybdis, is a massive undertaking. But even here, there are warning signs. The Charybdis, the first Jones Act-compliant vessel of its kind, has been plagued by delays. The turbine installation start date has been pushed back from September to late November due to a backlog of "punch list" items—about 200 of them, to be exact, with roughly 80 still outstanding as of early November 2025. ‘Punch List’ Items Delay Commissioning of Dominion Wind Turbine Vessel
CEO Robert Blue himself admitted his disappointment, stating they "did not properly account in our timing estimate for the risk inherent in being the first Jones Act–compliant wind turbine installation vessel to be built and regulated in the United States." That's corporate speak for "we underestimated the complexity of this thing." The overall cost estimate for the CVOW project has already risen from $10.9 billion to $11.2 billion due to tariff impacts. That's a 2.75% increase (actually, closer to 2.7477%, but who's counting?) And I've looked at enough of these filings to know that initial cost estimates are more often a floor than a ceiling.
The Wind Turbine Gambit: A Risky Bet?
The company still expects power to flow to customers in late Q1 2026, with completion by the end of 2026. But they've also "significantly reduced the weather and vessel maintenance schedule contingency," which could push some final turbine installations into early 2027. In other words, they're cutting it close.
This is where my analysis suggests a potential conflict of interest, or at least a tension between short-term shareholder appeasement (through dividends) and long-term investment in renewable energy. Are they prioritizing payouts now at the expense of future growth and stability? Are they underestimating the risks associated with a project as complex and novel as the CVOW? And more importantly, are they being completely transparent with investors about these risks?
The market, of course, loves a consistent dividend. It's a signal of stability, a promise of returns in a world of uncertainty. But a dividend built on shaky foundations is a house of cards waiting to collapse. The question isn't whether Dominion can afford to pay the dividend now; it's whether they can continue to afford it in the face of rising costs, project delays, and an increasingly volatile energy market.
A Dividend Built on Sand?
It's a gamble, plain and simple.
