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.
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