Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at or call 800-767-3771 ext.  9339.

The board of directors of the electric utility Dominion Resource Inc. (D - Snapshot Report) has approved of an increase in the annual dividend rate by 15 cents or 6.7%. The revised quarterly dividend of 60 cents will be paid to the shareholders in Mar 2014.

After the hike, the annual dividend will come to $2.40, with a dividend yield of 3.75%, higher than the industry average of 2.10%. The company aims to disburse up to 60% to 70% of its normalized earnings as dividends.

The systematic investments made by the company to develop its infrastructure have started to yield positive returns. Dominion expects 80% to 90% of its future earnings to come from its regulated businesses, which assures a steady source of income for the company.

The decision to form an MLP, export natural gas from the Cove Point LNG facility and the Blue Racer Midstream joint venture put the company in a solid position. We believe these initiatives will further boost Dominion’s earnings. Given the strong fundamentals, it is not overtly ambitious for shareholders to anticipate another dividend hike in 2014.

Dominion Resource continues to generate strong cash flow. In the first nine months of 2013, cash flow from operating activities was $2.95 billion, with $0.97 billion used for dividend payouts. We believe the cash flow generation capability will enable the company to meet its increased dividend payment obligation.

True to the defensive nature of all utilities, a few others have also recently hiked their annual dividend payouts. OGE Energy (OGE - Analyst Report) hiked its annual dividend by 6.5 cents or 7.8% while American Electric Power (AEP - Analyst Report) raised its annual dividend by 4 cents or 2%.

Dominion Resources has a Zacks Rank #3 (Hold). A better ranked stock in the utility sector is Westar Energy, Inc. (WR - Snapshot Report) carrying a Zacks Rank #1 (Strong Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%