Thursday, January 11, 2018

Latest Buy - Dominion Energy (D) Again.

Like i mentioned in this post when i initiated a position in Dominion Energy recently, i was hoping for D to fall to the mid to upper 70's, so that i could buy some more in order to decrease my cost basis.

Guess what - within a few days, dominion announced that they were planning to buy out the south Carolina based utility SCANA (SCG). Scana has been struggling a bit lately because of their failed nuclear plant, their stock has been lagging the overall market and has been down while the rest of the market is red hot.

The powers that be did not like this piece of news and punished Dominion's stock. Yes, this will put some pressure on dominion's cash flow for dividends, but they have put out statements confirming their commitment toward maintaining and increasing their dividends. 

The fundamentals haven't changed, moreover if they execute this correctly - this might be a good thing for the company in the long run.

With these things in mind, i doubled my initial small position in Dominion Energy at $76.7 a share. At the current dividend payout, the yield on cost is 4.01%, but since they have already established a 2018 dividend of $3.34/share - the forward yield on cost on this purchase is 4.35%.

Brings my overall cost basis down and the overall yield on cost to 4.18%. I will take that from a well run stable utility.

I will keep an eye out for D, and am open to making another small purchase if the stock falls another 5% from here.

Have you been buying anything in the relatively soft utility and REIT sector lately ?

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