Is Dominion Resources Still a Great Dividend Play?

E = Equity to Debt Ratio Is Weak

The debt-to-equity ratio Dominion Resources is 1.71, which is high. It’s also higher than competitors in the industry, Southern Company (NYSE:SO) and Consolidation Edison (NYSE:ED). In regards to cash vs. long-term debt, the situation is far from comforting. That said, long-term debt recently decreased by $200 million, which is a start.

Debt-To-Equity

Cash

Long-Term Debt

D

1.71

$81 Million

$20.71 Billion

SO

1.10

$1.26 Billion

$21.39 Billion

ED

.94

$69 Million

$10.77 Billion

 

T = Technicals on the Stock Chart Are Good

Dominion Resources has exceeded expectations over the past three years when it comes to stock performance. As mentioned above, the stock is up over 50% for that timeframe. While not nearly as impressive, the past year has seen a solid gain of 6.70%, which is good for a high-dividend play. Perhaps you shouldn’t get overly excited about Dominion Resources specifically, though. The industry tends to trade together, which you can see a hint of below.

1 Month

Year-To-Date

1 Year

3 Year

D

2.64%

1.51%

6.70%

55.52%

SO

-2.58%

-2.06%

2.38%

52.31%

ED

-2.24%

-5.82%

-.81%

46.07%

 

At $51.73, Dominion Resources is currently trading at its 50-day SMA of $51.73. It’s trading slightly lower than its 100-day SMA of $52.64. And it’s trading slightly lower than its 200-day SMA of $52.26.

 E = Earnings and Revenue Are Consistent

Revenue has been consistent over the past five years, but we haven’t seen growth. Some people might say this should be expected from a utilities company, but it’s still a business, and investors want growth. The good news is that earnings are always solid.

2007

2008

2009

2010

2011

Revenue ($)in billions

14.82

15.90

14.80

15.20

14.38

Diluted EPS ($)

3.88

3.16

2.17

4.76

2.45

 

Quarterly revenue has been steady for the most part while earnings have been sporadic.  

9/2011

12/2011

3/2012

6/2012

9/2012

Revenue ($)in billions

3.75

3.29

3.50

3.05

3.41

Diluted EPS ($)

.69

.36

.86

.45

.36