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Dominion Resources Hits 52-Week High

Zacks Equity Research

On Apr 19, 2013, shares of Dominion Resources Inc. (D) hit a 52-week high of $61.09. Dominion Resources registered a positive earnings surprise in the last quarter, with an earnings beat of 1.47%.

The company completed several growth projects in 2012 and is on course to complete a few more in 2013. In July 2012, Virginia City Hybrid Energy Center began commercial operations. The company started construction of the $1.1 billion, 1,329-megawatt (MW) Warren County three-on-one combined cycle plant which is expected to come online in the latter half of 2014.

In Dec 2012, Dominion Resources entered into a $1.5 billion midstream joint venture with Caiman Energy II LLC. This joint venture will provide midstream services to natural gas producers operating in the Utica shale in Ohio and portions of Pennsylvania.  Contribution from these projects will allow Dominion to meet its annual earnings growth target of 5% to 6%.

The company expects to continue its strong performance in 2013. The drivers include earnings from its newly completed growth projects at Dominion Energy, sales growth at Virginia Power and higher rider related revenues.

We expect long-term earnings growth of 4.63%. The Zacks Consensus Estimates for 2013 and 2014 are $3.40 and $3.58, respectively. This reflects projected year-over-year growth of 11.52% in 2013 and 5.37% in 2014.

The company has consistently paid dividends to its shareholders and has raised its quarterly dividend six times in as many years. The incremental dividend reflects the strength and successful execution of the company's business strategy. The current annual dividend is $2.25 per share for 2013, up 6.6% from $2.11 per share paid in 2012.

Dominion Resources currently carries a Zacks Rank #3 (Hold). Other electric utilities like Brookfield Infrastructure Partners L.P. (BIP), Huaneng Power International, Inc. (HNP) and Empresa Nacional de Electricidad S.A. (EOC) are performing well and currently have a Zacks Rank #1( Strong Buy).

Richmond, Va. based Dominion Resources Inc. was founded in 1909. The company together with its subsidiaries engages in producing and transporting energy in the U.S. With approximately 15,500 employees, the company’s market capitalization is $35.20 billion.

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