What Makes Dominion Energy (D) an Attractive Bet?

What Makes Dominion Energy (D) an Attractive Bet?

Mon, August 31, 2026 at 4:55 PM GMT+3 3 min read

• D -0.06%
• ^GSPC -0.48%

Hennessy Fund's Q2 2026 investor letter for the Hennessy Equity and Income Fund. The letter can be downloaded here. The letter discusses portfolio changes, emphasizing opportunities in equity and fixed income markets that can withstand economic uncertainty. The portfolio held businesses with a 23.0% pre-tax return on invested capital versus 16.1% for the S&P 500. The letter notes a reversal in U.S. equities, driven by AI spending and strong earnings, despite cautious sentiment among lower-income households. The focus on high-quality firms with durable advantages is expected to yield positive outcomes as valuation pressures mount, indicating that future market performance may hinge on fundamentals rather than speculative trends. The portfolio aims to capitalize on the overlooked valuations of quality companies, presenting significant investment opportunities. Also, check the fund's top five holdings to see its best picks in 2026.

In its second-quarter 2026 investor letter, Hennessy Equity and Income Fund highlighted Dominion Energy, Inc. (NYSE:D). Dominion Energy, Inc. (NYSE:D) is a leading utility company that provides regulated electricity and natural gas services in the United States. On August 28, 2026, Dominion Energy, Inc. (NYSE:D) closed at $65.55 per share. Over the past month, Dominion Energy, Inc. (NYSE:D) returned -4.65%, while its shares have gained 9.43% in the last 52 weeks. Dominion Energy, Inc. (NYSE:D) has a market capitalization of $57.65 billion, and its stock has traded within a 52-week range of $55.85 to $72.99.

Hennessy Equity and Income Fund stated the following regarding Dominion Energy, Inc. (NYSE:D) in its Q2 2026 investor letter:

"Our process remains bottom-up, and recent volatility has mainly given us opportunities to add, what we believe, are high-quality businesses at attractive valuations, funded by trimming positions that had appreciated or where our conviction had lowered.

In January, we initiated a position in Dominion Energy, Inc. (NYSE:D), which operates as a predominantly regulated utility with stable earnings, improving financial flexibility, and attractive long-term growth drivers. More than 90% of earnings are generated from regulated electric and gas utilities in Virginia, North Carolina, and South Carolina, providing predictable cash flows and low revenue cyclicality.

Since 2022, the company has sold non-core assets, reduced debt, and brought in a partner on its offshore wind project, strengthening the balance sheet and improving financial stability. Over the long term, Dominion should benefit from growing power demand as data centers and AI usage expand in Virginia. Its exclusive service areas and regulated business model provide steady income and support an attractive dividend."

Dominion Energy, Inc. (NYSE:D) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 47 hedge fund portfolios held Dominion Energy, Inc. (NYSE:D) at the end of the second quarter, which was 37 in the previous quarter. While we acknowledge the potential of Dominion Energy, Inc. (NYSE:D) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we discussed Dominion Energy, Inc. (NYSE:D) and highlighted that NextEra Energy, Inc. plans to acquire Dominion Energy, Inc., however, the deal has faced political scrutiny over concerns about rising electricity costs for consumers. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.