Beat Volatility in Energy With Dominion Resources

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There’s one piece of the energy sector that never bounces around — demand for electricity.

dominion resourcesIt’s the greatest growth sector in the world economy, and Dominion Resources, Inc. (D) is one of the best stocks in a long-term bullish sector.

Volatility is back. Thanks to all the quantitative easing that went on over the years, volatility was unnaturally tame while the banks and other financial institutions cashed in on free money from the Federal Reserve and easy money trading against that money.

Risk was limited for the global banking system until it could right itself from its excesses.

But the free lunch is ending in the U.S. What’s more, the energy boom that’s helped the U.S. economy recover is now under stress from Saudi Arabia as it tries to blow out the domestic shale producers by cutting oil prices and keeping them low enough that all the shale producers’ hedged positions expire and they’re flapping in the wind.

All this has roiled the markets and means one thing: volatility is back.

There are two ways take advantage of this new market reality: find the remaining growth opportunities that treat you like a business partner, or find the companies that are not only ports in the storm but have built a reputation of being the highest quality long-term investments in the markets. Or both.

And that’s Dominion Resources. D stock provides a solid, diversified energy play in a growing market that kicks off a nice dividend.

Turn on a light. Charge your phone and computer. Watch some TV. Cook dinner.

What do all these mundane, daily tasks have in common?

Electricity.

We are the most energy-intensive generation ever to exist on this planet. We’re also the most innovative. And that means lots of opportunities. Energy, specifically electricity generation and distribution, is one of the major growth industries across the globe.

And buying into “new tech” stocks like SolarCity Corp (SCTY), Vestas Wind ADR (VWDRY) and First Solar, Inc. (FSLR) only adds to your volatility and risk, it doesn’t diminish it.

These companies have been growing, but they’re barely generating enough revenue to cover expenses. The analysts need to see them grow and expand their markets and aren’t really concerned with their ability to raise revenue from their bases.

That’s very tempting and exciting for the companies (and their investors), but there’s a lot of danger baked into that short-term business model.

And after all the talk, do they really walk the walk? Did you know that Dominion has actually outperformed First Solar over the past five years by almost 140%?

You see, Dominion Resources’ service areas — Virginia and some of North Carolina — are growing. And they’re growing high tech businesses that rely on large amounts of consistent electricity.

Bear in mind, Dominion Resources’ service area includes major government and tech industry giants including the Pentagon and CIA as well as AOL, Inc. (AOL), Oracle Corporation (ORCL), SAP SE (ADR) (SAP) and General Dynamics Corporation (GD) and a host of other tech firms and government agencies. Their needs for electricity will not diminish in an increasingly automated world.

What’s more, Dominion is also one of a select few companies that is building a natural gas export facility in the U.S. While this business has been spun off into a master limited partnership (MLP) — Dominion Midstream Partners LP (DM) — Dominion has a controlling interest.

Natural gas is trading two to almost five times higher around the world than it does in the U.S. By exporting to these countries in Europe, Asia and South America, Dominion will increase it margins significantly and also boost production which will be a boon to DM as well as D stock.

Dominion is trading near its 52-week highs, and while it gets a low fundamental grade in the Portfolio Grader because of its recent run-up, it’s worth establishing a position in DM and reinvesting your dividends to keep buying consistently over time. Dominion Resources is a long-term gem, especially as the market digests the rising volatility.

Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip GrowthEmerging GrowthUltimate GrowthFamily Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.


Article printed from InvestorPlace Media, https://investorplace.com/2015/01/beat-volatility-with-dominion-resources-d-stock/.

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