Alright, let's get this straight. Another day, another company promising the moon with its dividends. Dominion Energy, huh? They're gonna pay out $0.6675 on December 20th. Big deal. A 4.5% yield? That's "fairly typical" according to...whoever wrote this. Typical for who, exactly? My grandma who clips coupons all day?
The Earnings Mirage
So, Dominion’s patting themselves on the back for potentially covering their dividend with earnings. Potentially. That’s the key word here. They were paying out a "fairly large proportion of earnings" before this announcement. And they weren’t generating positive free cash flow, either. Hello? Red flags waving like it's the damn Olympics.
Sustainable? They call this sustainable? It's like balancing a skyscraper on a toothpick. Sure, it might work for a little while, but you’re just waiting for the whole thing to come crashing down. They expect us to believe this nonsense, and honestly…
And get this: next year, EPS is supposed to grow by 31.2%. Right. And I’m supposed to believe pigs will fly next Tuesday. Even if that miracle happens, they're still looking at a 66% payout ratio. "Comfortable range," they say. Comfortable for whom? The executives raking in bonuses while the company teeters on the brink?
Volatility: The Only Constant
Let's talk about their dividend history. "Marked by instability," the report says. That's putting it mildly. At least one cut in the last 10 years. So, from $2.40 to $2.67 since 2015. A whole 1.1% growth per year. Wow. Color me impressed. That barely keeps up with inflation. It is hard to live on a dividend income if the company's earnings are not consistent.
Here's a thought – maybe, just maybe, people relying on dividend income would like something a little more…stable? A little less…likely to vanish when the market sneezes? But hey, what do I know? I just write about this stuff; I don’t live in a fancy skyscraper downtown like those guys do.
Growth? Don't Hold Your Breath
They've been able to grow earnings at a decent rate but with the payout ratio on the higher end we don't think the dividend has many prospects for growth. Translation: enjoy your crumbs, peasants.
Oh, and by the way, have you tried dealing with Dominion's customer service lately? It's like pulling teeth. Wait, what was I talking about? Oh yeah, dividends. See, this is why I hate dealing with these corporate giants. One minute you're talking about finance, the next you're stuck on hold for three hours listening to elevator music. Anyway...
"The dividend could prove to be unreliable." You think? You think, after all this, that maybe there's a chance this whole thing could go south? Give me a break.
So, What's the Catch?
Look, I ain't saying Dominion is going to collapse tomorrow. But I am saying that anyone who thinks this dividend is a "reliable income stream" is either delusional or being paid to say that. Maybe they'll turn it around. Maybe they'll become the dividend darling of Wall Street. But until I see some real, consistent growth and a commitment to stability, I'm calling this what it is: a risky gamble.
