It’s time to talk about an energy name that many are curious about. Here is the breakdown on $D, otherwise known as Dominion Energy.
Current Price: $73.98
52/Wk High: $90.89
52/Wk Low: $57.79
Market Cap: $62.0 Billion
Dividend: $2.52 / 3.42% Yield
Read below for the breakdown!
Dominion Energy ($D) is a major Electrical Utilities company that produces and transports multiple forms of energy. The company’s core business is electrical generation and distribution.
In total, Dominion Energy operates through three core segments; Dominion Energy South Carolina, Dominion Energy Virginia, and Gas Distribution.
It is also important to note that the company’s holdings include 85,000 miles of electric distribution lines and 10,400 miles of electric transmission lines.
In recent news, the company sold the entirety of its Gas Transmission and Storage segment assets to Berkshire Hathaway Energy, an affiliate of Warren Buffett’s Berkshire Hathaway.
The deal totaled $9.7 billion and included the assumption of $5.7 billion of indebtedness. Management noted that the deal will position Dominion Energy for a bright future of advancement.
“This transaction represents another significant step in our evolution as a company, allowing us to focus even more on fulfilling utility customer needs and positioning us for a bright and increasingly sustainable future,” CEO Thomas F. Farrell Said.
Dominion Energy is also working to shift into renewable energy, with the goal of shifting from 100% fossil fuel-based to hitting 16 GW of solar and wind energy by 2036, as well as 5.2 GW of offshore wind energy by 2035.
Shifting into the numbers Dominion Energy’s 2020 has been mostly flat, but the company reported a Q3 beat, with an EPS of $1.08, much better than the expected analyst’s consensus EPS estimate of $0.99.
Dominion also reported Q3 operating revenues of $3.607 billion, representing a $175 million decline from Q3 of 2019. Furthermore, the company also reported an income from operations of $27 million, much worse than the 2019 level of $1.104 billion.
As for reported earnings, Dominion reported an unaudited $356 million in earnings for the third quarter, a major decrease of $619 million from the 2019 Q3 earnings level of $975 million.
Moving into guidance, management expects operating earnings to land between $0.73 to $0.87 per share for Q4 of 2020.
Taking a look at the balance sheet, the numbers do not look bad.
Total Debt: $38.398 billion
Total Liabilities: $78.199 billion
Total Assets: $104.535 billion
Cash & Short Term Inv: $413 million
The valuation on the otherhand is rather high compared to competitors.
Price to Earnings: 37.70x
Price to Sales: 3.98x
Price to Book: 2.51x
Price to Cash Flow: 19.29x
On the flip side, management has done a solid job.
Return on Equity: 6.28%
Return on Assets: 1.47%
Return on Invested Capital: 1.74%
Given the numbers, the analysts are rather bullish with a mean price target of $83.67/share, representing a 13.15% upside.
It is also important to note that the high price target is $88.00/share, representing a 19.01% upside, while the low price target is $76.00/share, representing a 2.78% upside.
The big money is also involved, with 67.81% of Dominion Energy being owned by institutions. Top holders include The Vanguard Group, State Street Global Advisors, and BlackRock Institutional Trust.
On a technical basis, Dominion Energy could be flashing opportunity. According to the six-month charts, the MACD is running sideways with minimal momentum around -1.61.
The six-month charts are also indicating an RSI of 36.26 and CCI of -76.71, both of which are low.
In short, Dominion Energy will be a slow mover throughout the next several years compared to many other names, but the company has a bright future and is a solid long-term pick if you are looking to invest in utilities and energy.
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Disclaimer: This is not direct financial advice, simply an opinion based on independent research.