Dominion Resources Inc.D

Morningstar Rating

Stock Research and Analysis

by Travis Miller

Dominion Resources' strategy to pursue both growth and income investments has made it one of the largest energy companies in the United States. But we urge investors to use caution until the company chooses a distinct strategy. Even though we think Read more

Bulls Say

Dominion's E&P assets in Appalachia include acreage in the Marcellus and Lower Huron Shales, an area of recent interest because of several promising natural gas finds.

Shrewd investments have resulted in a diversified energy portfolio that includes low-cost coal and nuclear power plants, oil and gas reserves, and an LNG import terminal.

Dominion's low-cost generation fleet (dominated by nuclear and coal-fired plants) benefits disproportionately when natural gas prices rise.

Dominion's electricity and natural gas distribution businesses serve some of the fastest-growing regions in the eastern U.S.

The Cove Point LNG expansion and a fuel reset in Virginia should boost earnings from 2009 onward. Read more

Bears Say

Future emissions restrictions on coal-fired power plants could require expensive environmental upgrades.

Adverse regulatory changes have the potential to hurt Dominion's distribution businesses.

Future growth at Dominion's Virginia utility depends on successfully siting new plants and power lines despite residents' opposition.

Unsuccessful efforts to find natural gas or oil in Appalachia could burn through investors' capital that could have funded dividends or regulated utility investments. Read more

Strategy

Management has wandered all over the strategic map during the last decade, but it appears the current strategy favors the company's regulated utilities, natural gas pipelines, and storage facilities. Read more

Management

Thomas Farrell, 54, is president, CEO, and chairman of the board. He's been with Dominion since 1995 and has held several executive management positions at the company within the regulated utilities. He holds about 1.5 million shares either outright, Read more

Profile

Dominion is an integrated energy company. Its 26,500-megawatt electricity-generation fleet provides electricity to utility and merchant customers. The company has gas and Read more

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