Why Dominion Energy is a Solid Dividend Stock for the Next 20 Years

dominion energy stocks

Dominion Energy is an energy company that has its headquarters in Richmond, VA. However, its operations extend beyond the boundaries of a single state. For instance, it provides electricity to parts of Virginia in addition to both North Carolina and South California. Moreover, it has a number of other operations in a number of other states as well. As such, while Dominion Energy isn’t operating throughout the whole of the United States, it is nonetheless a name of note. For proof, look no further than the fact that its annual revenues are counted in the multiple billions. Something that says much about the scale of its operations.

What Does Dominion Energy Do?

For those who are curious, Dominion Energy’s operations are very simple and straightforward in nature. Some of these operations have been with the energy company ever since Dominion Energy has been called Dominion Energy. In contrast, others are much more recent pick-ups. Primarily, Dominion Energy is true to its name in that it generates electricity for sale in the markets where it operates. Naturally, this means that it has power plants situated in the states where it sells electricity. However, it is interesting to note that it has power generation facilities in other states such as Connecticut and Rhode Island as well. On the whole, power generation and power distribution make up the biggest share of Dominion Energy’s operations, which is as it should be. Besides these, Dominion Energy is involved in natural gas as well, which make up a significant percentage of its business presence. In the not so distant past, Dominion Energy was even more involved with oil and natural gas. However, it winded up selling most of the assets that were used for exploration as well as production in 2007, which was meant to focus its attention on its core operations rather than see it spread out over too many different operations in too many different fields.

Currently, Dominion Energy has recognized that human-caused climate change is a serious problem. As a result, it has come up with a plan to reduce its carbon emissions, which isn’t limited to a single initiative but instead encompasses a number of them. For example, Dominion Energy has engaged in various efforts to upgrade its existing facilities so that they will emit fewer greenhouse gases in the course of their routine operations. Likewise, Dominion Energy is investing in wind, solar, and other renewable sources of energy, which are expected to make up a bigger and bigger portion of electricity generation in the United States and beyond in the times to come. It remains to be seen how Dominion Energy will fare in a future in which the effects of climate change will become more and more apparent, but based on current occurrences, it seems safe to say that it recognizes the problem as a problem at the very least. In the meantime, Dominion Energy is continuing to generate its electricity through a mix of sources. Given its interest in natural gas, it is perhaps unsurprising to learn that close to a third of its electricity is said to have come from it. However, other important sources include nuclear, coal, renewables, and oil in that particular order, though its investments mean that the importance of renewables should rise over time.

Why Are Utilities Stocks Considered to Be Reliable Investments?

Generally speaking, utilities stocks are considered to be very reliable investments. This is because utilities are responsible for providing their customers with basic amenities, meaning that they have relatively inelastic demand whether the economy is doing well or not so well. As such, people tend to choose utilities stocks because they want a reliable stream of revenues in the form of consistent dividends paid out to them over time. The dividends of utilities stocks tend to come with low potential for further increase. This is because utilities are very regulated for very good reasons, meaning that it is difficult for utilities to raise their revenues through some of the means that other businesses in other less-regulated sectors can use. Due to this, utilities stocks aren’t necessarily a good choice for people who want increasing dividends over time. However, if people prioritize consistency over other considerations, utilities stocks are excellent investments. Something that explains much about why they are so popular during market downswings but less so during market upswings when more lucrative investment opportunities become abundant.

Of course, these are very broad generalizations for utilities as a whole. As a result, if people are interested in Dominion Energy, they should be looking into its performance in particular for further investment insight. In recent times, Dominion Energy has become a popular investment with hedge funds, which could be connected to a number of reasons. For instance, Dominion Energy is very recession-resistant, which is something that a lot of people are very nervous about in the present time. However, it should also be noted that there are sources that have praised the competence of its leadership, which might not be as concrete as hard numbers but shouldn’t be underestimated. With that said, for people who want dividends, what is particularly interesting might be the fact that Dominion Energy has a reliable record of raising its dividends over time. Something that speaks well of its ability in growing its operations.

Further Considerations

In any case, interested individuals should always learn more about businesses before they do anything involving either stocks or other investments. Investing involves considerable sums of money that can be lost within very little time. As a result, it makes sense for interested individuals to exercise care and consideration when making investment decisions, lest they wind up regretting choices that were made in the whim of a moment. In this as in other financial matters, thoroughness is a virtue.


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