John Stephenson
Dominion Resources Inc
D-N
TOP PICK
Feb 21, 2007
A US utility which also has E & P properties that they are looking to sell and expecting $16 billion for it. Intend to buy back stock and pay down debt. Negotiating an advanced agreement with Virginia regulators to get additional upside in cap return.
Some of the diversified utilities are well-positioned. Their rate structure is based on a cost plus so oil prices do not affect them. As the economy grows, more power will be required.
Q:"What companies could profit from liquid natural gas?" A:"You want to focus on some of the utility names. It's only 3% of the market and there are large groups opposing shipments."
4% dividend. Likes its diversity of utility, pipeline and liquefied natural gas terminals. Also has 6.2 TCF of gas and oil equivalent. Cheaper than some of its peers.
(A Top Pick Feb 21/07. Up 2% including dividends.)Thought there would be more of a catalyst by selling their oil/gas properties, which they did, but management paid themselves $16 million in bonuses. Now might be an interesting time to look at this.
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