Dominion Raises Dividend, Prepares For LNG Exports

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Dominion ( D ) raised its quarterly dividend Friday to 60 cents a share from 56.25 cents. The dividend is payable March 20 to holders of record Feb. 28.

Richmond, Va.-based Dominion is a big diversified utility. It transports and distributes electricity in North Carolina and Virginia and distributes gas in Ohio and West Virginia.

It has a liquefied natural gas import facility in Maryland and owns an extensive pipeline system.

In total, it serves retail customers in 15 states with 23,500 megawatts of power generation, 11,000 miles of natural gas transmission, gathering and storage pipelines and 6,400 miles of electric transmission lines.

But it's more than a boring utility. Wall Street sees growth prospects as the company moves into exporting liquefied natural gas. The company hopes to begin construction soon on an LNG export facility at Cove Point, Md., that will be hooked into a nationwide system of pipelines.

Thanks to technological advances in drilling, the U.S. is rapidly becoming a global leader in natural gas production. Output hit an all-time high of 25.3 trillion cubic feet last year. The U.S. is expected to export 100 million metric tons of LNG by 2025.

Dominion's dividend has grown steadily over the years, even if earnings have been sliding. It has a five-year dividend growth rate of 7%. The new $2.40 annual dividend translates to a 3.6% yield.

Earnings in 2011 and 2012 were $3.05 a share, down from $3.34 a share in 2010. But analysts forecast a 10% increase in 2013 and 7% increase in 2014. The earnings stability factor is 4 on a 0-to-99 scale where low numbers correspond to steady EPS growth. Pretax profit margins of 22% also help ensure future dividends.

It has been increasing debt. The long-term debt-to-equity ratio stood at 159% in 2012.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Personal Finance , Investing Ideas

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