Watch Dominion, but Wait

Dominion Resources (D) is one of the nation's best managed utilities. But buying now could be a mistake. Two challenges Dominion faces are its price-to-earnings ratio and its dividend. At 25.0, Dominion's P/E ratio is the highest in its peer group. Its dividend yields 4.08%, which is in line with the company's risk profile. To increase Dominion's market valuation would require higher earnings or increased dividends, both of which will be difficult to achieve in the near term. The long term is another story.

Almost 60% of Dominion's revenue is derived from 28,200 megawatts of power-generating facilities. On the merchant side, Dominion has been disposing of unprofitable facilities. It retired an unprofitable nuclear power plant that had been operating outside its service territory in Wisconsin. It announced plans to sell its interests in three coal-fired power plants -- two in Illinois and one in Massachusetts. It sold two other coal plants -- one in Illinois (State Line) and the other in Massachusetts (Salem Harbor)....581 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.