Defensive stock: Dominion Energy Inc.

Haven’t tried reading about Dominion Energy? This is your chance. This is not a very popular stock but we, the tropics, assure you that it is going to be worthwhile. 

A leading company in energy which cannot be compared with any of the oil giants whatsoever.

First of all, Dominion Energy is a company which is still quite small in comparison with other whales swimming out there. It has only embedded itself in 20 US states so far. 

Having 7 million customers across America is not that big of a deal in the country but there are a few very important things that the company has a strong vision in. A great vision is more crucial for a company to have than anything else. 

Business models do not matter, marketing does not matter. It is all about “what’s in it” for the future of our planet.

Dominion Energy is actually quite unique and exceptional energy company. It isn’t and does not want to become the next Exxon Mobil or Chevron. For Dominion it all starts with actions and then, a little talk and about them, mostly on the news

Dominion’s actions do not always involve dealing with energy directly, sometimes they are just something better for the planet. This includes massively implementing electric school buses in the country (largest deployment in the US) and other acts for societies in different states.

The company was founded in 1983 but the roots of it go back as far as the late 1700s. And it’s quite interesting that these roots had always been mainly embedded all around Virginia. 

More notably, the first company which is somewhat connected to Dominion Energy, as we now know it, had been built in 1909 and was named Virginia Railway & Power Company. Later on there had been many company name changes, mergers and splits. 

For example, 2 years after the incorporation of Dominion Energy, the company had split its distributor into 3 parties.

It should also be mentioned that Dominion Energy has three operation divisions as of today, including Dominion Generation (electricity generation) which is the largest, Dominion Exploration and Production (mainly natural gas), Dominion Virginia and North Carolina Power (Electricity distribution in 4 states). 

However, the company’s main focus is providing clean energy to America so obviously, Dominion had been a leader in nuclear energy since the late eighties, early nineties and for the last two decades, largely investing in solar power.

It is also interesting that in 2000 Dominion Energy had bought Consolidated Natural Gas, the main player in Pittsburgh, where a large part of emerging American industries were built. 

For example, Andrew Carnegie, one of the men who built the US was first brought from Scotland to Pittsburgh, a leading industrial city, especially during the civil war. Young Carnegie had started his absolutely massive career in steel near Pittsburgh. A company which would later become an absolute monopoly in steel was built and named Carnegie Steel.

Clearly, Dominion knew what it was doing when buying Consolidated Natural Gas. Interestingly enough, Dominion Resources started selling its oil and gas subsidiaries, mostly to such companies as the Eni

One may ask: Why sell your oil and reserves? Well, Dominion wanted to start focusing mainly on nuclear power, solar energy and natural gas. As a result, Dominion today gives all its best to few categories of operations: producer services, aggressive investments in solar, natural gas production, distribution and storage.

After the 2008 economic disaster which we all are so aware of, Dominion Resources, (Dominion Energy since 2017), decided to start acquiring companies. And oh boy had they acquired some decent fish in the ocean. 

A year before the name change, Dominion had acquired Questar Corporation, a natural gas company located in the mid-west. What followed was a purchase of SCANA Corporation, another leading natural gas and electricity company. 

The most notable year is probably 2018, when the company announced the “grid transformation program“.

The main target of Dominion Energy with this “grid plan” is to build an army of solar panels and windmills which would have as much value as 3000 megawatts of clean power for the planet. And probably make billions. 

The company is trying to achieve this goal until 2022. Having donated to political parties, as well as causes of people’s choice, the reputation of Dominion Energy is nearly excellent. However, the expansion plans using pipelines with the help of Duke Energy did not go so well as there have been lots of lawsuits and concerns about safety.

Although there is something else that seems to go well for Dominion Energy: attracting Berkshire Hathaway to invest in it. Warren Buffett, along with Charlie Munger and their friends at Berkshire had already saw some great value in the company some time ago. 

Berkshire had decided not to buy just stock of the company but get Dominion’s natural gas assets and so much more. These plans had been announced in July, 2020. When, or if the deal goes through, Berkshire will own one of the most influential natural gas, clean energy resources and plants.

Dominion Energy is often called “the least controversial company” because of its clean records, charitable actions, donations to political parties and help to other organizations like schools. However, there actually have been some issues the company had to take care of. 

Such as reports about high-voltage lines, pollution and other similar stuff. It shall also be mentioned that the charitable and vision-driven actions. As we started discussing how people view the company, we should also get into how investors should approach it.

First of all, we should keep in mind that Dominion Energy only started drastically transitioning from oil and gas to clean energy. Well, they have been doing stuff with nuclear energy from the early beginning. 

So, clean power. The business model (which is not that important in a company) of Dominion Energy is quite well made. Not only does it produce the energy, whether its nuclear, natural gas based or solar but also, transmits, deploys and basically takes care of everything there is that people need “energywise“.

For investors that might mean low competition, large market and large potential growth. However, since the early 1980s when the company was incorporated and started trading publicly, its stock had only grown more than 2000%. Not something to go crazy about compare to companies like Coca-Cola, Walmart or McDonald’s. 

Well but it’s not that Dominion is just a defensive stock, not giving up during the harsh times (everyone needs POWER), but dividend stock as well. The dividend yield of Dominion is nearly 4.7% which is absolutely bonkers. 

As time goes by, industries learn implementing new and safer options for producing something. This applies largely for nuclear plants/nuclear energy. We all know what happened in Chernobyl or Fukushima Daiichi. Nuclear disasters, that’s what we are afraid of. 

Radiation, mutated cancer, dogs with 2 heads and foxes making sandwiches. 

No panic needed actually, scientists and engineers used to have as much panic as we still have but it is crucial to understand how precisely, with great safety measures these reactors are built and operated.

Nuclear energy is one of the cleanest energies there are. Then implementation of nuclear power is also very broad and being researched as much as possible. At the same time, solar energy is actually wasted by a lot. 

Just a small percentage of the potential energy from the sun is absorbed into the solar panels. That is also a large problem on which scientists are constantly working on. As the technology develops and new chemical components are introduced, both nuclear and solar powers will very probably rule the world.

That’s exactly what today’s investors should keep in mind. There is absolutely no future for oil, gas, especially, coal. New corporations will soon be needed to get all those nasty things put back under ground. 

Each day electric automobiles are in operation globally, the whole oil and gas industry loses nearly 3 billion dollars. Every single day. That means, with such losses these oil giants we used to love so much, will die. Die very soon

They can’t wrap their heads around how to stop companies like Tesla now. Betting against and suing without no other option.

If solar panels aren’t optimized soon enough, logically, nuclear power will take over at least for some time. Although there won’t be a winner. The only winner that will thrive will be clean energy. And that’s exactly what Dominion does best. 

Nevertheless which one rules, nuclear or solar, the company is a leader in both. We are seeing a very bright future for Dominion Energy. It might even become a type of monopoly with all these services it provides. Well, who knows, people trust them, charities have done their work, Berkshire will have a part of it…

To conclude we need to say that there is a very good chance of Dominion Energy winning the majority of the electricity consumer market. With investments such as those Warren Buffet with his Berkshire Hathaway are willing to do, the company could become the next Chevron, Exxon Mobil, Shell or someone else. 

In addition, as mentioned earlier, all these volunteering and charitable actions had not been forgotten by people. With people and the government’s trust, Dominion Energy can achieve more than any of us might expect.

We, as many others hope that this vision-driven work, carefully-picked industries, charity and just good business practices will pay-off for Dominion Energy. Nobody really knows what Berkshire Hathaway had prepared for the company if the deal goes through or what future partners could join Dominion, future will show.

Defensive stock: Dominion Energy, Inc.

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