TheStreet.com's Jim Cramer says that Dominion Resources saw a lot of the green movement coming and moved aggressively.
What do you do with a company that raises its dividend twice in two years by 11%, that has superior growth characteristics in its sector, enlightened management and a plan for executives to buy stock regularly?
Well, in this market, that's an easy question to answer: You sell it. That's what's been going on with Dominion Resources (NYSE: D) (Cramer's Take), the Richmond, Va.-based utility that yields more than 6%, but is bumping along its 52-week low like every other stock I follow.
You would think, judging from the chart, that this utility must be heavily reliant on coal. That's not the case. This is one of those utilities that saw a lot of the green movement coming and moved aggressively to alternative energy, wind and biomass on top of a nuclear/natural gas platform.
The company is one of the cleaner ones, and therefore one of the more Obama-resistant plays in the industry. It has no debt rollover problems to speak of, unlike some of the Midwest utilities in which we have seen dividend cuts and, the kicker, it has a huge repository of natural gas. Yep, it owns the fuel it burns. Maybe one day Obama will realize that not all fossil fuels are created equal and that natural gas is twice as clean as oil. But even if he doesn't, the fuel is a bridge fuel, a necessary evil, on the way to a cleaner set of sources.
People want to be diversified. They want yield. I had liked Con Edison (NYSE: ED) (Cramer's Take) and Duke Energy (NYSE: DUK) (Cramer's Take) at one time, and I think that Exelon (NYSE: EXC) (Cramer's Take) and Edison (NYSE: EIX) (Cramer's Take) have excellent greener platforms, but with this new buy program and the giant repository of natural gas, coupled with the amazing decline in its stock, I am now going with Dominion.
At the time of publication, Cramer had no positions in any stocks mentioned. Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO.
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Reader Comments (Page 1 of 1)
3-05-2009 @ 11:15AM
beachpauls said...
Is "twice as clean" the same as "half as dirty"? "Obama proof"? Cramer, stop listening to the king of the pill-poppers. Read some Shakespeare. It's not just numbers. It is also about people, remember. Customers? That being said, D is worth a good look. At $20 it may be a "buy".
3-05-2009 @ 9:09PM
BHarrison said...
Question: Hasn't the corporate "stock options plans" mostly just been a means for CEOs and other eligible upper managment to buy stock at lower than market prices; and then over the long term be able to buy the controlling interests of the corporations so that they could "vote" or exert influence to increase their salaries, bonuses or "other compensations.
While these stock options plans originally seemed to have some positive aspects, it seems that they were quickly exploited to the advantages of the CEOs and upper management, and to the great disadvantage of the other stock holders.
The "executive buy plan" requiring the "insiders" to hold the stock long term may be a needed "adjustment" for the abuses of the past.
Paying managment bonuses in stocks, linked to corporate profitability, and requiring them to hold those stocks long term (or pay a substantial penalty) is perhaps one way to "adjust" some of those abuses of the past and to focus managment's concern on long term, solid profits . . . instead of just "doing anything" to boost quarterly profits without regard for the future.
Managment has to be a stake holder in the long term profitability of the corporations that they manage.