Dominion stock takes nose dive

By Jerry Bellune
Posted 7/12/18

You might blame it on Dominion Energy’s bid to buy SCANA.

The Virginia electric power giant’s stock lost 15.9% of its value in the first half of 2018.

That’s according to data …

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Dominion stock takes nose dive

Posted

You might blame it on Dominion Energy’s bid to buy SCANA.

The Virginia electric power giant’s stock lost 15.9% of its value in the first half of 2018.

That’s according to data provided by S&P Global Market Intelligence.

It is blamed on investors’ uncertainty about its proposed acquisition of Lexington County-based SCANA, owner of debt-ridden SC Electric & Gas.

In early January, Dominion offered to buy the beleaguered utility for $7.9 billion in stock.

The deal would help bail SCANA out of its failed $9 billion nuclear fiasco while bolstering Dominion’s growth prospects.

State lawmakers want SCANA to pay full price for the failed project.

This puts the Dominion deal in jeopardy.

Its offer is less than what lawmakers seek.

After agreeing to buy SCANA, Dominion boosted its earnings growth target from 6% to 8% annually through 2020.

The higher growth rate would support the company’s plan to increase its dividend at a 10% annual rate.

But with lawmakers and regulators cutting SCE&G’s nuclear surcharge from 18% to 3%, it’s unclear if Dominion can grow as fast as it planned.

This makes Dominion stock riskier at the moment.

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