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In the competitive landscape of utility stocks, both NiSource (NI) and Dominion Energy (D) are attracting investor attention primarily for their roles in powering the burgeoning data center industry. NiSource has secured contracts with tech giants Amazon, Alphabet, and Microsoft, while Dominion Energy serves a broad base of data center clients across Virginia. Investors are currently valuing NiSource at a P/E ratio of 23.4, slightly higher than Dominion Energy's 22.1, based on trailing twelve-month reported earnings. This begs the question: what distinct advantages does Dominion Energy offer at a lower valuation that NiSource does not?

Earnings Outlook: Diverging Forecasts

NiSource has demonstrated positive momentum by raising its earnings forecasts. During its October 28, 2026 earnings call, management revised its midpoint forecast for adjusted earnings per share (EPS) for 2026 upwards from $2.05 to $2.06. Furthermore, the company provided its initial 2027 forecast, projecting EPS between $2.22 and $2.30, which includes an anticipated $0.05 to $0.09 contribution from its data center-focused power plant construction business. This optimistic outlook for the data center segment, which saw Microsoft added as a new customer, is expected to see full ramp-up between 2031 and 2032, with a significant portion of earnings materializing post-2027.

Conversely, Dominion Energy has narrowed its earnings guidance for 2026. On its October 30, 2026 call, the company indicated it now expects operating EPS to fall within the upper half of its previously stated range of $3.45 to $3.69. Dominion highlighted its substantial contracted data center capacity, exceeding 12 gigawatts under existing electric service agreements.

Financial Health: Debt and Cash Flow Comparison

Regarding financial leverage, NiSource currently holds less debt than Dominion Energy. NiSource's total debt stands at 83.1% of its market capitalization, compared to 92.0% for Dominion Energy. Both companies are currently investing more in their operations than they are generating from them, resulting in negative free cash flow. Over the last twelve months, NiSource's free cash flow deficit was 8.1% of its market value, while Dominion Energy's was 10.6%.

NiSource is financing its ambitious growth plans, which total $40 billion through 2033 (including approximately $8 billion earmarked for data center projects), partly through the issuance of new shares. Management anticipates issuing $400 million to $600 million in new shares annually in the near term, which will dilute existing shareholders. In contrast, Dominion Energy's management projects relatively fewer new share issuances in 2027 and 2028.

Dominion Energy's Potential Edge and Regulatory Hurdles

Dominion Energy presents a compelling case with its faster sales growth and wider operating margins at a slightly more attractive valuation. Its revenue surged by 21.5% in the twelve months ending September 30, 2026, significantly outpacing NiSource's 10.0% growth. Over the past three twelve-month periods, Dominion's revenue growth averaged 9.8%, compared to NiSource's 7.0%. Furthermore, Dominion's operating margin for the latest twelve months was 28.6%, exceeding NiSource's 27.4%.

However, Dominion Energy faces a significant hurdle with a pending merger with NextEra. This proposed acquisition has drawn opposition from Virginia's state leaders and residents concerned about potential accelerated rate increases. Hearings are slated to begin on November 17, with the deal's completion anticipated in the latter half of 2027. If the merger proceeds, the financial figures presented here, which pertain to Dominion as a standalone entity, would be superseded by those of the combined company. A Dominion shareholder's ultimate return would then be contingent on the merger's terms, which are not detailed in this comparative analysis.

The risks for NiSource are tied to potential delays in its data center revenue streams or a narrowing of its debt advantage due to new borrowings. Should these materialize, investors could be left with a company exhibiting slower sales growth trading at a higher multiple.

In summary, Dominion Energy currently leads in terms of valuation multiple, sales growth, and operating margin. NiSource holds an advantage in its lower debt levels. While both companies have seen their 2026 forecasts shift towards the higher end of their ranges, and NiSource has bolstered its data center business expectations, the realization of NiSource's future data center earnings remains a key uncertainty. The company plans to segment its data center business reporting starting with its year-end results in February 2027, making this segment's performance a critical indicator to monitor.

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