Dominion vs. Southern: Bigger Yield or Better Dividend Growth?
Dominion Energy offers a bigger yield, but Southern Company keeps raising its payout year after year while Dominion's sits below its pre-cut level. For retirement investors choosing between them, that difference carries real consequences worth examining closely.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Should someone investing for retirement own Dominion Energy (NYSE:D | D Price Prediction) or Southern Company (NYSE:SO) right now? Dominion pays the bigger yield. Southern pays the dividend that keeps growing. For most income investors, that difference decides the question.
Dividend Record: Southern Takes It on Reliability
On yield alone, Dominion leads. It yields 4.35% on an annualized dividend of $2.67. Southern yields 3.56% on a forward dividend of $3.04.
The track records are where they split. Dominion has paid $0.6675 every quarter from the March 2022 ex-dividend date through September 2026. Before that, it cut the quarterly payment from $0.94 to $0.63 in late 2020. Today’s payment is still below what shareholders collected six years ago. Southern raised its quarterly dividend every year over the same stretch: from $0.68 in early 2023 to $0.76 starting in May 2026.
Coverage is close. Dominion’s dividend is about 74.8% of the $3.57 midpoint of its 2026 operating EPS guidance. Measured against trailing GAAP EPS of $2.89, which impairments pulled down, that comes to about 92.4%. Southern’s forward dividend is about 73.3% of trailing EPS of $4.15. The coverage is similar, but only Southern keeps raising. Winner: Southern.
Growth Runway: Dominion Has More Contracted Demand
Dominion targets 5–7% annual EPS growth through 2030 and expects to land in the upper half of that range for 2028 through 2030. A $64.7 billion five-year capital plan supports that target. Management reported over 53 gigawatts of data center capacity in various stages of signing, with about 12 gigawatts already under electric service agreements. Second-quarter revenue rose 17.6% YoY to $4.48 billion, and operating EPS of $0.79 beat the $0.68 consensus.
Southern’s quarter was solid. Adjusted EPS came in at $1.13, ahead of the $1.00 estimate, and commercial kWh sales rose 7.3% on data center demand. Revenue, however, was essentially flat at $6.98 billion. Dominion also trades at a lower forward P/E: 16 versus 17. Winner: Dominion.
Risk and Regulation: Southern Is the Steadier Holding
Dominion’s beta is 0.619. Southern’s is 0.301, which means its shares have moved far less with the broader market. Dominion’s proposed $66.8 billion merger with NextEra Energy (NYSE:NEE) still needs shareholder and regulatory approvals, and its terms include $2.25 billion in shareholder-funded bill credits for customers. Until the deal is decided, Dominion holders cannot be sure what they will own or what its dividend policy will be. The company’s offshore wind project is 81% complete, but its cost estimate rose to $11.65 billion. In the second quarter, $626 million in unregulated impairments cut GAAP EPS to $0.37.
Dominion has scored with regulators. It won 100% of its revenue request in its Virginia rider filing, and its FFO-to-debt ratio is above 15%. Southern carries smaller problems: about $205 million in accelerated wind depreciation still to come in 2026, plus regulatory disallowances at Nicor Gas. Measured by EV/EBITDA, which counts both debt and equity, Southern is cheaper at 11.48 versus Dominion’s 13.51. The long-term record shows the same gap. On an adjusted basis, Southern’s stock returned 162.41% over 10 years, while Dominion’s gained 33.91%. Winner: Southern.
Verdict: Southern Is the Retirement Pick
Southern wins on the two areas that matter most to a retiree: a dividend that comes every year and a stock that moves less. Its income has grown each year since 2023, while Dominion’s has stayed flat since 2022 and still remains below its pre-cut level.
Dominion fits a different type of investor: one who wants the higher yield today, sees data center growth as the main reason to own a utility, and is comfortable with a pending merger. Analysts are hold-heavy on both, with 12 hold ratings on Dominion and 13 on Southern. Two things are worth watching next: regulatory rulings on the NextEra deal and Southern’s next dividend declaration, which would extend its streak of increases.
Contact [email protected] for any questions or corrections.
Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
