Is Dominion Resources Still a Great Dividend Play?

With shares of Dominion Resources (NYSE:D) trading at around $51.56 is D an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

Dominion Resources is far from the most exciting stock to own, but you might be surprised to know that the stock is up more than 55% over the past three years. When you combine that with a 4.20% yield, that’s quite a play. Looking ahead, there is good news and bad news.

The good news is that Dominion Resources is seeing lower interest expenses and a lower effective tax rate. There is also good potential for increased revenue from growth projects.

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The bad news is that Dominion Resources is expecting lower margins and increased expenses going forward. This is after seeing unplanned outages for Q3. The third quarter saw poor YoY earnings and revenue growth. These aren’t great signs, which is perhaps why 16 out of 21 analysts have recommended a Hold. The other five recommended a Buy. No one recommended a Sell. This is Dominion Resources we’re talking about. The world could end and no one would recommend a Sell. That’s the kind reputation Dominion Resources has established. However, can that reputation be justified considering current circumstances?