4-Star Stocks Poised to Pop: Dominion Resources

• Email
• Share
• Print

Based on the aggregated intelligence of 120,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, power provider Dominion Resources (NYSE: D) has earned a respected four-star ranking. While five-star stocks have been the best performers, our data has shown that four-star stocks still outshine the market by a significant margin and shouldn't be taken lightly; conversely, low-rated stocks have woefully lagged the market average.

With that in mind, let's take a closer look at Dominion's business and see what CAPS investors are saying about the stock right now.

Dominion facts

Headquarters (founded)	Richmond, Virginia (1909)
Market Cap	$19.5 billion
Industry	Electric Utilities
TTM Revenue	$15.8 billion
Management	CEO Thomas Farrell II (since 2006) CFO Thomas Chewning (since 1999)
Return on Equity (average last three years)	18.3%
Dividend Yield	4.7%
Competitors	Duke Energy (NYSE: DUK), Exelon (NYSE: EXC)
CAPS members bullish on D also bullish on	Exxon Mobil (NYSE: XOM), General Electric (NYSE: GE)
CAPS members bearish on D also bearish on	AT&T (NYSE: T), Citigroup (NYSE: C)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 389 of the 435 members who have rated Dominion -- some 89% -- believe the stock will outperform the S&P 500 going forward. These Foolish bulls include etfman and ChazzReinhold.

Two weeks ago, etfman noted that Dominion "is growing at 10% a year, pays a dividend over 4.5%, and is starting to go green. It is a great infrastructure play. It has pipelines, storage, a LNG terminal, and nuclear power plants."

In a pitch from two days earlier, ChazzReinhold takes a different approach, highlighting the stock as an intriguing, undervalued asset play:

Dominion owns the drilling rights to approximately 600-800 thousand acres of the Marcellus Shale, which is loaded with natural gas. They recently assigned the rights to drill on approximately 115 million acres to Antero Resources for $347 million ($205 million after tax). As part of that deal, Dominion will receive a 7.5% royalty on future natural gas production from the assigned acreage. The Marcellus Shale is luring some of the country's largest gas producers to Pennsylvania. Thanks to a state Supreme Court decision six years ago, Pennsylvania is now one of the biggest natural-gas producing states , if not the biggest , that does not tax the methane sucked from beneath its ground. However, the state legislature is heavily considering a natural gas tax. Evidence of the value that lies within the Marcellus Shale.

What do you think about Dominion, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 120,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.