Dominion (D) Keeps The Streak Alive, Ups Dividend By 10%

Dominion Energy (NYSE:D) has maintained its record of dividend hikes with the board of directors approving a 10% increase in the quarterly dividend. The new dividend of 83.5 cents will be paid in March 2018. This is in line with the company’s objective to increase annual dividend by 10% per year from 2017 to 2020, starting fourth-quarter 2017.

The annual dividend will now be $3.34, reflecting a yield of 4.03%, higher than the S&P 500’s 1.74% return.

Consistent Hike in Dividend Rate

Dominion Energy has consistently been rewarding its shareholders with dividends. The company is among the elite group of dividend payers in the utility group.

The current hike marks the 15th consecutive year of dividend raise by the company.

Another utility, The York Water Company (NASDAQ:YORW) , also has a record of increasing annual dividend consecutively for the last 21 years. It has been rewarding its shareholders with payouts for more than 200 years, arguably boasting the longest record of regular dividend payment to its stockholders. (Read More: York Water Rewards Investors With 4% Dividend Hike)

Factors Behind Regular Payment

Dominion Energy is steadily expanding its electricity generation along with its transmission and distribution capabilities. It has plans to invest $3.7-$4.2 billion annually to strengthen operations. More than 90% of its earnings come from its regulated assets giving a visibility and surety toward its forward earnings.

Dominion Energy has also emerged as a big name for having a large-scale renewable and clean energy generation portfolio. Since 2013, the company has invested $2.6 billion to develop solar projects. At present, it is constructing a number of solar projects in Virginia. In October 2017, the company announced that it will add new solar unit to serve a new data center Facebook Inc. (NASDAQ:FB) plans to build in Central Virginia.

The company is also benefiting from its inorganic growth moves, particularly the acquisition of Questar, which proved to be accretive.

Investment in Gas Infrastructure

Natural gas, for its clean burning nature, has become most popular source of energy across the globe. The increasing production of natural gas in different basins also calls for midstream support through pipelines, refining and storage facilities.

Dominion Energy has invested in the midstream operation and has plans to invest more in midstream operation and benefits from the same. A project of nearly $1.3 billion is expected to start commercial operations in late 2018, which is expected to boost performance of the company and help it sustain its strong dividend run.

Higher demand for midstream services is resulting in fresh investment and new pipelines. Companies are conducting open season to find the viability of new pipelines.

Anadarko Petroleum Corporation (NYSE:APC) announced that its subsidiary, DBM Oil Services, LLC, is holding a binding open season to find out the viability of its high-vapor-pressure oil-gathering and treating system serving portions of Reeves, Loving, Ward and Winkler Counties in West Texas. (Read More: Anadarko Arm to Test Gathering & Treating System's Viability)

Price Movement

Shares of Dominion Energy have outperformed the industry in the last six months. The stock has gained 3.2% compared with the industry’s rise of 1.2%.

The company is gaining from expansion of its electric transmission, natural gas facilities and midstream assets.

Zacks Rank

Dominion Energy carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks Editor-in-Chief Goes "All In" on This Stock

Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.

Download it free >>

Dominion Energy Inc. (D): Free Stock Analysis Report

The York Water Company (YORW): Free Stock Analysis Report

Facebook, Inc. (FB): Free Stock Analysis Report

Anadarko Petroleum Corporation (APC): Free Stock Analysis Report

Original post