Dominion Resources Sum-Of-The-Parts Valuation, LNG Multiples, And An MLP: 15%-40% Upside
Lateral Capital Management
Lateral Capital Management
Dominion Resources: A New 2 Bcf/D Pipeline For Marcellus And Utica Gas
Richard Zeits • 34 Comments
Richard Zeits • 34 Comments
Mon, Apr. 4, 5:57 PM
- Dominion Resources (NYSE:D) -1.5% AH after saying it plans to sell 10.2M common shares, raising ~$750M of gross proceeds, through an underwritten public offering to Citigroup.
- D says it plans to use the proceeds for general corporate purposes, including to help fund its planned $4.4B acquisition of Questar (NYSE:STR) and to repay short-term debt.
- Now read Purchase agreements in place for Atlantic Coast pipeline, Dominion says
Mon, Feb. 1, 8:01 AM
- Dominion Resources (NYSE:D) agrees to acquire Questar (NYSE:STR) for ~$4.4B, including debt, in an attempt to expand its natural gas operations.
- Dominion's $25/share cash offer represents a ~23% premium to STR's closing price on Friday.
- Dominion says the combined company will serve ~2.5M electric utility customers and 2.3M gas utility customers in seven states, and operate more than 15.5K miles of natural gas transmission, gathering and storage pipelines and 24.3K MW of power generation.
- D -2.4%, STR +20.2% premarket.
Sep. 8, 2015, 8:48 AM
- SunEdison (NYSE:SUNE) +5.9% premarket after announcing a strategic partnership with J.P. Morgan's infrastructure investment group to fund renewable energy projects in both operating and construction stages, an initial investment of which will be a 33% interest, valued at $300M, in a 425 MW portfolio of domestic solar assets owned by Dominion (NYSE:D).
- SUNE has an option to acquire the remaining stake in the portfolio, which includes 24 projects in California, Connecticut, Georgia, Indiana, Tennessee and Utah; 15 of the projects entered service in 2013 and 2014, and the remaining projects either have been completed or have expected in-service dates in 2015.
- The companies also announce a joint venture for the 210 MW Three Cedars solar project in Utah, developed by SUNE, in which D will invest $320M to acquire 50% of the cash equity and 99% of the tax equity in Three Cedars.
Aug. 12, 2015, 8:02 PM
- SunEdison (NYSE:SUNE) +3.7% AH on news of a joint venture with Dominion (NYSE:D) to develop a new 420 MW solar project in Utah.
- Dominion will invest $500M to acquire 50% of the cash equity and 99% of the tax equity in the Four Brothers project, while SUNE will contribute $150M.
- The companies say the project, which is expected to produce enough electricity to power more than 90K homes, already is under construction and should be operating commercially by mid-2016; the project is contracted under a long-term agreement for 20 years with Berkshire Hathaway subsidiary PacifiCorp.
Jun. 29, 2015, 11:38 AM
- Coal stocks (KOL +0.3%) are rallying after the Supreme Court threw out the EPA’s first-ever rules requiring coal-fired power plants to cut emissions of mercury and other toxic air pollutants, saying the agency should have weighed the cost of compliance in deciding whether to regulate.
- The ruling means the EPA must go back to the drawing board, which possibly could push any new emissions rules past Pres. Obama’s time in office.
- Coal companies are enjoying hefty gains: WLT +28.2%, ACI +15.1%, BTU +11.2%, ANR +5.4%, CLD +5.2%, RNO +3.9%, WLB +1.9%, CNX +1.4%.
- Select utility names also are seeing some strength: AEP +1%, PCG +0.9%, D +0.6%, NEE +0.6%, EXC +0.3%.
Jun. 10, 2015, 9:57 AM
- PJM Interconnection, the largest U.S. electricity grid, wins approval from U.S. regulators for a plan to increase reliability at power plants and avoid a repeat of the shutdowns and price spikes during the unseasonably cold winter of 2014.
- Under the plan, which takes effect in 2018 after a capacity auction this year, generators that promise to be available during peak demand periods will receive higher payouts than other plants and will be penalized for failing to meet the commitments; the auction, planned for May, was delayed after FERC declined PJM’s initial proposal and asked for more information.
- The largest generators in PJM are trading higher at the open: NRG +4.2%, AEP +1.4%, EXC +3.1%, PEG +1.1%, DYN +7.2%.
- Also: TLN +4%, NEE +1.2%, PCG +0.7%, EE +1.5%, SO +0.5%, D +0.2%, DUK +0.9%, XLU +0.9%.
Nov. 12, 2014, 2:14 PM
- Utility stocks, among the year’s top performing sectors in the market, are sharply lower today - a bad sign, says Weeden & Co. head researcher Michael Purves, who believes now is the time to reduce or hedge utility holdings such as the Utilities Select Sector SPDR Fund (XLU -1.9%).
- Ultra-low bond yields have made utility stock payouts look good by comparison., but valuations have been moving up; Purves says the rally has put XLU’s P/E ratio for the next 12 months at 17.4x, near a 10-year high.
- Investors ought to “start to take profits, given the run was getting long in the teeth,” Purves writes.
- The top 10 XLU holdings are all lower today: DUK -2.5%, NEE -1.7%, D -1.9%, SO -1.4%, EXC -2.8%, AEP -2%, SRE -1.7%, PPL -1.8%, PCG -1%, PEG -2.8%.
- Other ETFs: IDU, VPU, UPW, RYU, FUTY, FXU, PUI, SDP
Sep. 18, 2014, 12:53 PM
- Banks, insurers, brokerages and anything else starved for yield continue to gain following yesterday's FOMC news. Among the gainers are Bank of America (BAC +1.9%) - which breaks above $17 for the first time since April - Citigroup (C +2.7%), Wells Fargo (WFC +1.1%), PNC (PNC +1.1%), Fifth Third (FITB +1.7%), SunTrust (STI +1.2%), Schwab (SCHW +2.3%), Prudential (PRU +2.5%), and Lincoln National (LNC +2.4%).
- The XLF +1.2%, KBE +1.5%, and KRE +2%.
- Financial sector ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, KBWB, FNCL, RKH, QABA, FINU, KRU, KBWR, RWW, RYF, KRS, FINZ
- Lit up bright red is the utility sector (XLU -1%), led by Southern Company (SO -1.1%), Dominion Resources (D -1.2%), Duke Energy (DUK -1.4%), and Pinnacle West (PNW -1.9%).
- Utility ETFs: XLU, IDU, VPU, UPW, RYU, FUTY, PUI, FXU, SDP, PSCU
Jun. 25, 2014, 3:55 PM
Jun. 3, 2014, 12:45 PM
- EPA chief Gina McCarthy says she expects for significant changes in proposed state emission goals before a final rule is issued next year if the individual states show they can’t meet the targets.
- McCarthy says the agency made changes when developing its rules on mercury pollution in 2012 after utilities complained, and says she "wouldn’t be surprised if we made significant” revisions to the carbon proposal.
- McCarthy notes "confusion" around the targeted 30% emission cuts, saying it’s not a goal of the plan but an estimate of what the EPA thinks can be achieved.
- Coal names are broadly lower: WLT -4.4%, ACI -3.7%, ANR -2%, ARLP -1.9%, CNX -1.3%, CLD -0.3%, BTU -0.2%.
- Big utilities are mostly higher: EXC +1.6%, AEP +1%, NRG +0.7%, D +0.5%, XEL +0.4%, SO +0.3%, PEG +0.2%, NEE +0.1%, DUK -0.2%
- ETFs: XLE, XLU, TAN, ERX, KOL, IDU, VDE, OIH, ERY, FCG, VPU, DIG, KWT, GASL, DUG, IYE, GASX, PXJ, RYE, FENY, UPW, RYU, FUTY, FXN, FXU, DDG, SDP
Apr. 30, 2014, 12:54 PM
- Rex Energy (REXX +3.2%) says it signed binding agreements with Dominion (D) and Texas Gas Transmission to pipe natural gas from Pennsylvania to the midwest and Gulf coast.
- The Dominion deal will allow for expanded capacity on ~235 miles of existing pipeline, while the Texas Gas agreement will allow for expanded capacity on ~690 miles of existing pipeline.
- Northland Capital raises its REXX price target to $28 from $25 following the gas transport deals as well as an impressive Q1 earnings report, as production exceeded the high end of guidance and EBITDA beat the firm's estimate (Briefing.com).
- Financial terms of the separate deals were not disclosed.
Mar. 11, 2014, 2:19 PM
- NRG Energy (NRG +1.7%) agrees to acquire Dominion Resources' (D -0.2%) retail electric business for an undisclosed sum, in a bid to expand its presence in the northeastern U.S. and Texas.
- Dominion's retail electric business serves more than 600K customers in northern states from Illinois to New York, while its Cirro Energy brand is focused on Texas.
- NRG has made a steady series of deals to boost its retail power business and its collection of power plants; it became the biggest wholesale electric company in the U.S. last year after it acquired GenOn Energy for ~$1.7B, and it is buying coal plants, wind farms and other assets out of bankruptcy from an Edison International subsidiary.
Oct. 16, 2013, 3:38 PM
- Arch Coal (ACI -5.6%) is downgraded to Underweight from Equal Weight at Morgan Stanley, which expects even cheaper natural gas will knock down coal prices and ACI’s profits.
- ACI is a thermal-heavy name with significant balance sheet leverage, making it vulnerable to prolonged depressed market conditions, the firm says.
- Exelon (EXC -2.7%), which the firm also downgraded, is taking a hit; Consol Energy, which is also exposed to east coast coal is down too.
- The firm sees two utilities benefiting from current trends; Calpine (CPN +0.8%) and Dominion Resources (D +2%), although the advantage may already be priced into D’s shares.
Oct. 8, 2013, 2:56 PM
- Jim Cramer touts three dividend yielding utilities as the strongest bounceback candidates in the event of a U.S. default.
- Dominion's (D +0.2%) strong core utility business allows for the continued increase in dividends, Cramer says, and an MLP spinoff will bring in lots of cash.
- ConEdison (ED +1.5%) is a stock Cramer believes is somewhat insulated from the D.C. debacle simply because it services the New York metro area.
- He likes Southern Company's (SO +1.4%) "long-term history of paying the dividend through the toughest times imaginable... they get the sanctity of the dividend better than just about any other utility."
- Separately, New York Gov. Cuomo calls on the state's Public Service Commission to reject ED’s request for a rate hike next year.
- Utilities are generally higher today as investors avoid riskier bets amid shutdown and default nervousness.
Sep. 12, 2013, 11:54 AM
- Any talk of MLPs still excites investors, as shares of Dominion Resources (D +3.5%) surge after the energy producer said earlier today at the Barclays energy conference that it intends to create a master limited partnership by contributing assets with up to $1B-$2B of EBITDA.
- Yesterday, the Obama administration authorized natural gas exports from Dominion's Cove Point terminal in Maryland; the company sees Cove Point as a key part of the prospective MLP.
Sep. 12, 2013, 9:11 AM
Dominion Resources, Inc. is a diversified energy company. It supplies electricity and natural gas to homes, businesses and wholesale customers in the Eastern United States. The company's operations also include a regulated interstate natural gas transmission pipeline and underground storage... More
Industry: Electric Utilities
Country: United States
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