Dominion Resources (D) has an estimated gain of 3.2% through the next year. According to analysts’ estimates, it has a median price of $78.6 against its current market price of $76.2.
Of the 20 analysts tracking Dominion Resources on January 4, 2017, three recommend it as a “strong buy,” while three recommend it as a “buy.” The other 14 analysts recommend Dominion as a “hold.” None of the analysts offered a “sell” recommendation.
For peers, NextEra Energy (NEE) has an estimated gain of 15% through next year. According to analysts’ estimates, NextEra Energy has a median price of $136.67—compared to its current market price of $119.10. Southern Company (SO) has a one-year median price target of $50.9. It implies an upside of 4% in the next year—compared to its current market price of $48.8.
Dominion Resources is one of the fastest growing electric utilities among the S&P 500 Utilities (XLU) index. It’s targeting ~8% earnings growth in the next few years. Its ongoing Questar acquisition and Cove Point LNG Terminal are expected to accelerate its earnings growth. After the Questar acquisition, Dominion will own 12,000 miles of natural gas pipelines and one of the largest gas storage systems. Dominion Midstream (DM), Dominion’s MLP, is also on a growth path due to strong dropdowns.
Dominion seems like a fair investment option considering its risk and reward proposition. Although analysts’ price target for Dominion implies trivial upside for a year, its above-average earnings and dividend growth makes it an apt pick for 2017.
To learn more about utilities and their price targets, read A Look at S&P 500 Utilities with Attractive Upsides in 2017.