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Welcome to the VIP edition newsletter from ALPHA, our Stock Deep Dive!
In this edition, you’ll read an in-depth analysis of a great stock we’ve been watching: 👇
Stock Deep Dive: Dominion Energy (D-US, $41.2B MCAP)
Since the Fed began its hiking cycle, the market has had no shortage of yield. Higher federal funds rates have led to a lot of capital rotating into money market funds.
These are risk-free, daily liquidity ETFs that pay north of 5% for people to park their cash there.
Sounds pretty sweet.
In addition, we didn’t quite get the cutting cycle that everyone expected. Forecasts for cuts were all paired back over 2024, and we still await the first decrease.
However, many signs show that the economy is slowing, and we do have forecasts pricing a 60% chance of a cut in September.
When we have rate cuts, people start looking elsewhere for yield.
Where do they look? Utilities. These companies provide essential services such as electricity, natural gas, water, and sewage and pay juicy dividends.
This week’s pick is a company in this space that can benefit from a lower interest rate environment, and it’s also at the intersection of a megatrend.
Let’s dig in!
Overview 👉 What Does Dominion Energy Do?
How Do They Make Money? 👉 Tiered SaaS Revenue & Self-Managed
Data Center Alley 👉 Virginia Data Center Density
By The Numbers 👉 Key Metrics
Risks 👉 Potential Pitfalls
Overview 👉 What Does Dominion Energy Do?
Dominion Energy (Dominion) is an American power and energy company that operates primarily in the eastern United States. The company is involved in a range of activities related to energy production and distribution.
Electricity Generation: Dominion generates electricity through a diverse mix of energy sources, including natural gas, nuclear, coal, hydro, wind, and solar power. It operates power plants in several states.
Natural Gas Transmission and Storage: The company owns and operates an extensive network of natural gas pipelines and storage facilities. This includes the transmission of natural gas to various markets and the storage of natural gas during peak demand periods.
Electricity Transmission and Distribution: Dominion owns and maintains the infrastructure necessary to deliver electricity to homes and businesses, including high-voltage transmission lines and local distribution networks.
Customer Services: Dominion provides customer service, including billing, energy efficiency programs, and support for residential, commercial, and industrial customers.
Regulated and Unregulated Operations: Dominion operates both regulated utility businesses, where rates are set by state utility commissions, and unregulated businesses, where they compete in the open market.
How Do They Make Money? 👉 Business Segments
Dominion uses a variety of fuels to power its electric generation fleet and purchases power for utility system load requirements. By fuel source, the actual system output is broken down as follows:
Source: Company Filings
Dominion’s revenue sources can be broken down as follows: