Jim Cramer Put These 14 Stocks Under the Microscope

11. Dominion Energy, Inc. (NYSE:D)

Number of Hedge Fund Holders: 46

A caller inquired about Dominion Energy, Inc. (NYSE:D), given that the current administration seems to be “against clean energy”. Here’s what Cramer had to say in response:

“I like Dominion. It’s fine. For a while, I was worried about the balance sheet. I think we’re okay. I think we’re okay with Dominion.”

Dominion Energy, Inc. (NYSE:D) delivers regulated electricity and natural gas services, supported by a diverse energy portfolio that includes substantial generation and distribution infrastructure. The company focuses on both traditional and renewable energy solutions.

In October 2024, Cramer was not sure about the company and said that he was not “quite ready to recommend” it at that time. However, he still mentioned some positives as he commented:

“Finally, there’s Dominion Energy, which passed the YEV test with flying colors. This is a gas and electric utility in Virginia, North Carolina; South Carolina, small gas utility business in South Carolina; and a big clean power generation business, one that includes a nuclear plant along with some wind, solar, renewable, natural gas.

I actually used to like Dominion a lot. This was a great growth utility for many years under the leadership of former CEO, Tom Farrell, long-time friend of the show. Before he retired as CEO in 2022, he stuck on as executive chairman but in April 2021, Farrell tragically died after a battle with cancer the day after he retired.

After that, Dominion seemed a bit lost to me. Frankly, in late 2022, the stock started to slide, but ultimately shaved off more than half its value before it bottomed roughly a year ago. Since then, it’s done much better. Stock’s up almost 42% from its lows last October and management conducted a top and bottom-line business review in order to come up with a new strategy. The problem for Dominion was that business just got too sprawling… They invested heavily in some expensive solar projects and some very complicated offshore wind projects. They also spent heavily to improve the regular power grid.

So, suddenly, the company was spending enormous tons of money. Plus, in 2022, anything related to alternative energy was just killed. But now they’ve simplified the business significantly. Dominion sold off most of its natural gas business at this point, [which] netted them a little more than $14 billion. Going forward, Dominion wants to be a pure-play-regulated electric utility with a merchant power kicker, I think that is a terrific idea. Right now, we have immense demand for electricity in this country. In fact, Dominion service area includes Northern Virginia, meaning they sell power to the world’s largest data center hub. According to Bloomberg, new data centers in the area face a seven-year wait for Dominion power, which tells you there’s insane demand for power.

Of course, Dominion needs to make some large investments in order to be able to handle all that demand, but they’ve got a bunch of money from selling off their natural gas businesses. I think they can afford it. That said, I’m not super thrilled about the strategy because many of these natural gas businesses were excellent, especially the pipelines and the stake in liquified natural gas export facility in Chesapeake Bay. I still need convincing on those expensive offshore wind projects. Although management says they’re largely complete at this point, I wouldn’t start one now to tell you that. Overall though, I’m warming back up to Dominion Energy. As much as I like these natural gas assets, they absolutely needed to simplify the business, and given the bull market power generation, sticking with electricity was the right call. Plus, pays a nearly 5% yield.

… the bottom line, when you screen for yield, earnings, growth, and value and you make that in screen incredibly harsh like we have, you wind up with a list of seven great stocks… and one that I actually have to tell you I’m intrigued [about], even though I’m not quite ready to recommend it. And that’s Dominion Energy.”