Is Dominion Energy a Good Investment?

OVERVIEW

Dominion Energy is a company based in the United States. The company operates public utilities (natural gas and electricity) in Virginia, North Carolina, South Carolina, and many other states in the US. The company operates thousands of lines to distribute natural gas and electricity to its customers. The company was founded in 1983.

Why You Should?

  1. Dominion Energy is a great reopening play in an investor’s portfolio. The company has been negatively impacted because of the pandemic as restaurants and other large venues close and stop using electricity and natural gas. Once the pandemic is over and these places start using the company’s products, this will benefit the company and its investors.
  2. Dominion has taken many initiatives in the past in order to adopt more clean energy production equipment (like solar panels). This adoption will set up the company for the future of the energy industry. This will also benefit investors in the company in the long-term.
  3. Dominion serves many customers in the United States. The company has over 7 million customers in 16 states. These customers have offered increasing streams of recurring revenue. This has benefited the company in the past as they have reported fairly stable results. This has also benefited investors in the company.
  4. Dominion Energy is an extremely safe and stable investment in an investor’s portfolio. This is because the company offers its customers essential products and services. In this case, it is electricity and natural gas utilities. This has helped the company go through tough economic times as they have reported stable results through these times (unlike other companies). This will benefit the company and its investors in the future.

Why You Should Not?

  1. The COVID-19 pandemic has hurt some of the company’s results. As restaurants and much of the commercial/enterprise economy shut down due to the pandemic, Dominion saw a decrease in volumes going to these places. This has hurt the company and its investors. However, these impacts will only last in the short to mid-term.
  2. Dominion faces tough competition from other energy companies. Dominion signs mid to long-term contracts with cities and municipalities. However, these contracts can be awarded to other companies like Duke, Southern, Consolidated Edison, and many others. This has hurt the company in the past and might hurt the company and its investors in the future.

MY OPINION

I think that Dominion Energy is a decent long-term investment due to its position as a good reopening play, its clean energy initiatives, its large base of customers, and a safe investment option. However, tough competition and impacts from the COVID-19 pandemic might hurt the company and its investors in the future.

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Aaditya Patel

Aaditya Patel

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.