Dominion Resources Sum-Of-The-Parts Valuation, LNG Multiples, And An MLP: 15%-40% Upside
- Dominion Resources, Inc. (“D”) appears over-valued relative to its large cap regulated peers. However, when adjusted for earnings growth and dividend yield, D trades in-line with its comps.
- D’s Sum-of-the-Parts (“SOTP”) valuation suggest the stock is fairly valued with 10% to 30% upside.
- When you combine this with the valuation look-through from comparable pure-play US LNG terminal multiples in Australia and North America, there is a total upside of 15% to 40%.
- The MLP crystallizes for investors the contribution of LNG to the SOTP and may act as a pricing catalyst for bridging the valuation gap with the current D share price.
- When the current bull market in growth stocks comes to an end, we would expect that a relatively high-growth utility like Dominion will outperform "glamour" growth stocks.
Dominion And WhiteWave Go To Overtime In Game 7 Of The Wild Card Round Matchup
- Dominion had to take WhiteWave to overtime of Game 7 to win the series.
- Dominion is a high dividend yielding growth utility stock. I know growth stock and the utility sector don't belong in the same sentence, but in this case it does.
- WhiteWave Foods is a great growth stock which has been on fire of late and is due to cool off, but it will pick up again in due time.
Dominion Resources - An Impressive Dividend Growth Investment In The Utilities Sector
- This article compares four large-cap, high-yield U.S.-based stocks in the multi-utilities industry.
- Despite having the lowest yield and highest forward earnings valuation of its group, Dominion Resources appears to be a compelling investment.
- Long- term earnings growth and potential future dividend growth should allow Dominion to maintain its value better than slower-growth competitors in a rising interest rate environment.
Booking Profits From Royal Caribbean And Trying To Energize Them With Dominion
- Dominion is a slow moving dividend paying vehicle that I debated moving to my dividend portfolio.
- I bought into Royal Caribbean right before earnings and it turned out to be a blessing in disguise.
- With the global economy appearing to be in slowdown mode I'm putting my money into Dominion because I feel it is a safe haven with the dividend it provides.
Dominion Resources: A New 2 Bcf/D Pipeline For Marcellus And Utica Gas
- Dominion, Duke, Piedmont and AGL Resources are joining forces to build a 1.5 Bcf/d (expandable to 2+ Bcf/d) Atlantic Coast Pipeline from Marcellus South.
- The pipeline will cost $4.5-$5.0 billion and should reward Dominion and its partners with a profitable and strategically important growth opportunity.
- The project enables additional investment opportunities for Dominion in attractive Virginia and North Carolina markets.
- Dominion will continue to benefit from its position as a major natural gas midstream and downstream player in the Marcellus and Utica region for years to come.
Bringing Amazon Up To My Growth Portfolio In Place Of Dominion Resources
- While the overall market is flying high, I want a high flyer such as Amazon in my portfolio.
- Dominion is a slow moving dividend paying vehicle that I debated moving to my dividend portfolio.
- Amazon is actually inexpensive based on short-term earnings growth expectations.
Why I'm Not Buying Dominion Resources At This Price
- Shares in D have doubled in the past five years, which has caused the dividend yield to drop to only 3.54%, well below the industry average.
- D is more expensive than its competitors both on a P/E and P/S basis.
- Payout ratio of 88.75% is very high. The dividend growth will be limited by EPS growth.
- I'm staying on the sidelines for now, waiting for a better entry point.
- D shares have traded down recently pushing yields back to 5%.
- D shares remain expensive but a pullback to market earnings multiple or further yield increase may provide a buying opportunity.
- D is a solid dividend payer however earnings growth and payout ratio may bound future increases.
- Just because utilities are supposed to be safe income vehicles doesn't mean they should be excluded from extensive and objective financial analysis. Right?
- Exelon and First Energy are two examples of how risky utilities' dividends can be -- and shareholders suffered as a result.
- Let's take a look at Dominion Resources' dividend strength.
Watching Dominion, The Utilities Select Sector SPDR ETF And The Risk Free Rate
- The Options market is looking for XLU to move lower.
- The 10- and 20-year treasury rates have moved up in June.
- Risk and reward considerations for utility stocks such as Dominion.
Insider Activity, LNG Export, Solar: Buy Dominion?
- Several activities underway, including an LNG export project and solar.
- Four insider purchases of company stock.
- Litigation, environmental regulations, and coal.
Dominion Resources: 3 Different Insiders Have Purchased Shares This Month
- 3 insiders purchased Dominion stock within one month.
- The stock was sold by no insiders in the month of intensive purchasing.
- 2 of these 3 insiders increased their holdings by more than 10%.
Dominion Resource: Adding Cheap Renewable Resources To Generation Mix
- Dominion Resources Inc. has recently acquired the two biggest solar projects in southwest Tennessee that will add 32 megawatts of renewable energy to the company’s generation mix.
- Solar energy is cheap and does not make Dominion susceptible to volatile fuel prices such as natural gas and supports the company’s bottom line.
- The company currently has a consensus rating of “hold” by the twenty rating firms that cover the company.
Dominion Resources: Excessive Valuation For This Leveraged, Non-Growing Utility Giant
- Dominion Resources has failed to show revenue or earnings growth over the past decade.
- Modest share repurchases, dividends and lower interest rates pushed up the share price.
- Potentially higher interest rates, leverage and excessive valuation remain risks to the business.
Dividend Winners: High Yields And Low Volatility Part II: Dominion Resources
- D is among Citi Equity Research Bond Refugees.
- D trades at a premium to the S&P 500 and similar utilities.
- D dividend is stable but more attractive bond refugee stocks make it a hold.
- Dominion plans to invest $14 billion in the next five years.
- The U.S solar industry grew by 41% in 2013, and Dominion started three solar projects to penetrate this energy segment.
- The company increased the dividends to $2.4 per share, reflecting a growth of 6.67%.
Dominion Resources: Will Natural Gas E&P Make This Stock A Winner For Retirees?
- Retirement investments require safety of principal, even during market collapses.
- D has served me well during my retirement and provided extra funds for my children and grandchildren when times got tough.
- D is a high-growth Dividend Contender with 11 years of increasing dividends.
Sat, Jan. 24, 8:25 AM
- In a low-yield world, the newly launched iBillionaire High Dividend Index - which tracks the trading moves of 25 investing-savvy billionaire investors such as Stanley Druckenmiller, James Dinan and Nelson Peltz - actually lives up to its name with a dividend yield of 5.34%.
- At 24%, the index has a high allocation of energy shares, including OXY, TRP, CNP, COP, BP, ATLS, CVI, WMB, APL, RIG and ARP.
- Also worth noting is that the index contains some high-yielding mortgage REITs, an area most investors hate right now but where billionaires seem to find value; examples are NRF, AGNC and CIM.
- No mutual fund or ETF tracks this index, but it offers a fishing pond of income investment ideas to research further.
- The top 20 holdings: TLM, CVC, GM, TIME, AEE, D, STAY, KMI, TROX, EXC, STNG, PPL, IRM, PFE, KKR, KAR, F, MIC, LO, ABBV.
Nov. 26, 2014, 12:42 PM
- A new report from BofA Merrill Lynch stays positive on the top utility stocks for the rest of the year and 2015, offering five recommendations for utilities paying high current dividends and expected to raise dividends significantly over the coming years.
- The firm sees Dominion Resources (NYSE:D), which currently pays a 3.3% dividend, growing its dividend 7% this year, in line with the last four; many analysts think the new EPA bill may actually provide a tailwind for the company.
- Also suggested: AEP, PCG, UIL, PPL
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
Oct. 31, 2014, 2:57 PM
- Dominion (D -1%) submits a request to the FERC to begin an environmental review of the proposed $4.5B-$5B Atlantic Coast Pipeline.
- JV partners Dominion, Duke Energy (NYSE:DUK), Piedmont Natural Gas (NYSE:PNY) and AGL Resources (NYSE:GAS) plan to build and own the pipeline, which would supply North Carolina and Virginia with 1.5B cf/day of natural gas from the Marcellus and Utica shale basins of West Virginia, Pennsylvania and Ohio.
- Dominion earlier reported Q3 earnings that came in below expectations and revenues fell 11% Y/Y, as the utility said its service territory experienced one of the mildest summers in the last 30 years.
Oct. 31, 2014, 8:01 AM
Oct. 30, 2014, 5:30 PM
Oct. 15, 2014, 11:56 AM
Oct. 6, 2014, 12:31 PM
- The proposed $5B Atlantic Coast Pipeline that would deliver natural gas to the southeastern U.S. is finding pockets of opposition along its planned path in West Virginia and Virginia, where it would carve through two national forests.
- To be sure, the pipeline has plenty of supporters, including Virginia Gov. Terry McAuliffe, who says the project will boost the state’s economy by attracting new businesses with the promise of abundant and relatively cheap energy supplies.
- The pipeline being proposed by Dominion Resources (NYSE:D), Duke Energy (NYSE:DUK) and other partners would deliver 1.5B cf/day of natural gas from drilling in the Marcellus and Utica shale deposits.
- The pipeline requires approval from the FERC and will be reviewed by various state environmental agencies; the companies hope to receive approval by mid-2016 and to start operating the pipeline in 2018.
Oct. 6, 2014, 11:57 AM
- Dominion Midstream Partners, a subsidiary of Dominion Resources (D -0.3%), announces terms for its IPO, planning to raise $350M by offering 17.5M shares at $19-$21 each.
- The common units being offered represent a 27.4% limited partner interest in Dominion Midstream, or 31.5% if the underwriters fully exercise their option to purchase additional units; Dominion would own the remaining amount.
- Dominion Midstream will control the Cove Point LNG facility on the Chesapeake Bay and own ~136 miles of natural gas pipeline that connects Cove Point to interstate natural gas pipelines; the company also is developing a nat gas export and liquefaction facility which should be in service by 2017.
- The company will list its common units on the NYSE under the ticker DM.
Sep. 30, 2014, 8:01 AM
- U.S. regulators gave final approval yesterday for Dominion Resources (NYSE:D) to build the east coast's first natural gas liquefaction plant at its Cove Point site on the Chesapeake Bay.
- The $3.8B project would allow Dominion to export liquefied natural gas through the facility, which it plans to complete and begin exporting by June 2017.
- The FERC decision included 79 conditions the company must follow, including creating a complaint system and doing a noise survey for neighbors, as well as various required check-ins with authorities during and after construction.
Sep. 19, 2014, 10:50 AM
- The worldwide gas glut is prompting Japanese and Indian firms to resell some of the U.S. liquefied natural gas they had committed to buy several years ago, signaling tempered enthusiasm for U.S. energy, Reuters reports.
- Japanese utilities Tokyo Gas and Osaka Gas as well as India's Gail are dialing back on their U.S. LNG commitments via stake sales to European traders and utilities after realizing they can't handle the initial surge of volume due to low demand at home.
- Tokyo Gas, which bought 1.4M metric tons/year of LNG over 20 years from Dominion's (NYSE:D) Cove Point, reportedly has offered to sell 0.75M tons/year to at least one European energy firm; Gail is offering 1M metric tons/year for its first five years of supply from Cheniere Energy's (NYSEMKT:LNG) Sabine Pass project.
- ETFs: UNG, DGAZ, UGAZ, BOIL, GAZ, KOLD, UNL, NAGS, DCNG
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
Sep. 2, 2014, 9:59 AM
- Dominion Resources (D +0.6%), Duke Energy (DUK -0.1%), Piedmont Natural Gas (PNY +0.4%) and AGL Resources (GAS -0.1%) say they plan to form a joint venture to build the proposed Atlantic Coast Pipeline, which would funnel natural gas from West Virginia to North Carolina.
- The $4.5B-$5B, 550-mile natural gas pipeline would deliver natural gas supplies to markets in Virginia and North Carolina, and is expected to be in service by late 2018.
- Dominion would build and operate the Atlantic Coast Pipeline on behalf of the venture, and would own a 45% stake; DUK would hold 40%, PNY would have a 10% stake, and GAS would own 5%.
- Subsidiaries and affiliates of all four JV partners plan to be customers of the pipeline under 20-year contracts, while PSNC Energy also plans to be a customer under a 20-year contract.
Aug. 14, 2014, 7:15 PM
- The U.S. Energy Department has finalized its plan to revamp the process for approving liquefied natural gas exports, largely codifying a process first proposed in May.
- Beginning immediately, the DoE will only issue final rulings on whether exports are in the public interest after the FERC has completed an environmental review of the project.
- The benefits of the change extend unevenly to the dozens of companies now vying to export U.S. natural gas, and some in the industry say the new process will exacerbate permitting delays for most companies.
- The biggest winner under the new approach is Cheniere Energy (NYSEMKT:LNG), which already had gained FERC approval but faced a nearly two-year wait for the required Energy Department review of its proposed Sabine Pass expansion; it now moves to the front of the line to get a permit from the DoE.
- Another winner is Exxon's (NYSE:XOM) Golden Pass project in southeast Texas, which also was far down the Energy Department’s list, even though it was well into the FERC review.
- The new policy will not affect companies that already have received conditional approvals, such as Dominion's (NYSE:D) Cove Point project, Sempra's (NYSE:SRE) Cameron LNG project and Leucadia National's (NYSE:LUK) Oregon LNG project.
Aug. 13, 2014, 11:59 AM
- A judge rules that Calvert County, Md., improperly granted zoning exemptions for Dominion Resources' (D +0.5%) proposed Cove Point natural gas liquefication plant.
- The judge wrote in his ruling that he does not expect his decision to have any direct effect on whether the plant will be built, but environmentalists believe the ruling will delay the $3.8B project.
Aug. 8, 2014, 12:05 PM
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