Dominion Energy Stock Pulls Back to Support. Smart Time to Enter?
Dominion Energy (D) stock should be on your watchlist. Here is why – it is currently trading in the support zone ($57.54 – $63.60), levels from which it has bounced meaningfully before. In the last 10 years, Dominion Energy stock received buying interest at this level 6 times and subsequently went on to generate 14.5% in average peak returns.
| Peak Return | Days to Peak Return | |
|---|---|---|
| 3/15/2019 | 4.1% | 101 |
| 8/2/2019 | 21.1% | 215 |
| 3/30/2020 | 14.6% | 231 |
| 1/15/2021 | 13.0% | 217 |
| 10/18/2021 | 7.4% | 3 |
| 12/1/2021 | 26.9% | 128 |
But is the price action enough alone? It certainly helps if the fundamentals check out. For D Read Buy or Sell D Stock to see how convincing this buy opportunity might be.
Single stock can be risky, but there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. We go beyond just equities. Is a portfolio of 10% commodities, 10% gold, and 2% crypto in addition to equities and bonds – likely to return more during the next 1-3 years, and protect you better if markets crash 20%? We have crunched the numbers.
Here are some quick data points for Dominion Energy that should help decision:
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- Revenue Growth: 5.3% LTM and 7.5% last 3 year average.
- Cash Generation: Nearly -53.0% free cash flow margin and 29.7% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in last 3 years for D was -2.4%.
- Valuation: D stock trades at a PE multiple of 22.6
- Opportunity vs S&P: Compared to S&P, you get lower valuation, higher revenue growth, and better operating margins
For quick background, Dominion Energy provides energy production and distribution through multiple regional segments, managing a portfolio of approximately 30.2 gigawatts of electric generating capacity.
| D | S&P Median | |
|---|---|---|
| Sector | Utilities | – |
| Industry | Multi-Utilities | – |
| PE Ratio | 22.6 | 24.0 |
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| LTM* Revenue Growth | 5.3% | 5.2% |
| 3Y Average Annual Revenue Growth | 7.5% | 5.3% |
| Min Annual Revenue Growth Last 3Y | -2.4% | -0.1% |
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| LTM* Operating Margin | 29.7% | 18.6% |
| 3Y Average Operating Margin | 27.0% | 17.8% |
| LTM* Free Cash Flow Margin | -53.0% | 13.3% |
*LTM: Last Twelve Months
What Is Stock-Specific Risk If The Market Crashes?
That said, Stock D isn’t immune to big drops. It fell about 25% in both the Dot-Com bubble and the 2018 correction. The Covid sell-off hit it for around 33%, while the Global Financial Crisis knocked it down over 41%. The worst was the Inflation Shock, with a 52% plunge. Even solid setups can take a hit when the market turns sour.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.