Has Dominion Resources, Inc. (D) Become the Perfect Stock?

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Like many utilities, Dominion Resources, Inc. (NYSE:D) has been working hard at taking advantage of the boom in natural gas. On one hand, Dominion generates electricity for both regulated utility customers and the wholesale power market, and there, a new clean-coal facility will likely give way to the same conversions to natural-gas-fired plants that peers have done. In Dominion’s core markets, both The Southern Company (NYSE:SO) and Duke Energy Corp (NYSE:DUK) have taken big steps toward bring gas-fired plants on line, and that trend will likely continue if gas prices stay low.

Dominion Resources, Inc. (NYSE:D) also has a huge natural-gas business as well, delivering gas to utility customers but also owning an extensive network of nat-gas pipelines and storage systems. That gives Dominion Resources, Inc. (NYSE:D) characteristics of a midstream energy company, especially as it expands its network to take advantage of shale-gas plays in the eastern U.S. like the Utica Shale, and contemplates the conversion of its Cove Point liquefied natural gas facility as a potential export terminal.

Yet as exposed as Dominion Resources, Inc. (NYSE:D) is to natural gas, it also has an extensive nuclear fleet. Exelon Corporation (NYSE:EXC) has a more concentrated nuclear portfolio than Dominion, but unlike Exelon, the fact that nearly a quarter of Dominion’s generation capacity comes from nuclear power hasn’t held back Dominion’s stock.

For Dominion to improve, it needs to get its revenue moving in the right direction, and the best way to accomplish that will be for natural gas prices to rise. Until that happens, it’s hard to see Dominion moving much closer toward perfection.

The article Has Dominion Resources Become the Perfect Stock? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Dominion Resources, Exelon, and Southern.

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