Yahoo Finance Dominion (D) Benefits From Investment in Renewable Assets
Dominion Energy’s D investment in modernizing infrastructure and contributions from organic and inorganic assets will boost earnings. The divestiture of Gas Transmission & Storage operations will increase its focus on regulated operations.
However, this Zacks Rank #3 (Hold) firm faces risks related to nuclear power plant operations and rising interest rates.
Tailwinds
Dominion Energy has a well-chalked-out long-term capital expenditure plan. The company’s portfolio realignment strategy focuses on regulated assets through investments in regulated infrastructure and divestiture of its merchant generation facilities and electric retail energy marketing business.
Dominion aims to attain net-zero carbon and methane emissions from its electric generation and natural gas infrastructure by 2050. It plans to invest $42 billion in offshore wind and solar projects during 2022-2035 to further expand renewable operations and increase the renewable energy capacity by more than 15% per year, on average, over the next 15 years. It has also taken initiatives to install smart meters and grid devices and enhance customer service through the customer information platform.
Stable performance has allowed its management to declare a regular dividend for its shareholders. The company has been paying dividends to its shareholders for a very long time, Mar 20 dividend marking the 380th consecutive dividend. The current dividend yield is 5.12%, which is better than the industry’s average yield of 3.36%.
Headwinds
Risks related to delays in the completion of capital projects, interest rates, complex government regulations, operation of nuclear facilities and third-party dependence on natural gas supply are potential headwinds for the company.
Stocks to Consider
Some better-ranked utilities in the same industry are NiSource NI, IDACORP IDA and OGE Energy OGE, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NiSource’s long-term (three to five-year) earnings growth rate is pinned at 7%. It delivered an average earnings surprise of 0.5% in the last four quarters.
IDACORP’s long-term earnings growth rate is pinned at 3.7%. It delivered an average earnings surprise of 4.6% in the last four quarters.
OGE Energy’s long-term earnings growth rate is pinned at 17.9%. It delivered an average earnings surprise of 19.9% in the last four quarters.
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NiSource, Inc (NI) : Free Stock Analysis Report
OGE Energy Corporation (OGE) : Free Stock Analysis Report
Dominion Energy Inc. (D) : Free Stock Analysis Report
IDACORP, Inc. (IDA) : Free Stock Analysis Report
