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Dominion (D) to Issue 12.5M Equity Units to Fund Expenses

Zacks Equity Research

Dominion Energy Inc. D announced that it is going to offer 12.5 million Series A equity units at $100 each, with an option for underwriters to purchase 1.875 million units to cover over-allotments.

Each equity unit issued will have a contract to purchase shares of its common stock in the future and a 1/10 undivided beneficial ownership interest in one share of Dominion cumulative perpetual convertible preferred stock with a liquidation preference of $1,000 per share.

The company intends to utilize net proceeds from the issuance of equity units for general corporate purposes and repayment of short-term debt.

Dominion’s Investment Plans

Dominion plans to invest $26 billion in the 2019-2023 time period to strengthen its existing infrastructure. Planned investment in different segments and positive returns from the completed capital projects are expected to drive Dominion’s earnings at a rate of 5% per year through 2020 and 5% plus thereafter. Secured earnings from more than 95% regulated assets will continue to drive Dominion’s bottom-line growth.

These investments were directed to strengthen operations of the company and prepare it to effectively meet the demand from the increasing customer base. In addition, these investments are assisting it to lower carbon footprint. Initiatives undertaken by Dominion will enable it to lower emissions by 60% within 2030 from 2000 levels.

Green Initiatives Across the United States

Dominion is not the only utility that is undertaking emission-reduction initiatives. Utilities like NextEra Energy NEE, Xcel Energy XEL and CMS Energy Corporation CMS, among others, have also made elaborate plans to add more renewable energy in their generation portfolio and lower emission levels.

Courtesy of the initiatives undertaken by utilities across the United States, the U.S. Energy Information Administration forecasts nearly 18% of the electricity generated in the United States during 2019 to come from renewable sources and anticipates the figure to touch almost 20% in 2020.

The increasing usage of renewable sources for electricity generation is clearly indicating the declining popularity of coal as a fuel source among utility operators in the United States.

Price Movement

In the past 12 months, shares of Dominion have gained 16.2% compared with the industry’s 20.1% rally.

Zacks Rank

Dominion currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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