Domino Energy has not had the best of starts to a New Year, despite announcing plans to acquire SCANA Corporation in a bid to spur long-term growth. Underperformance over the past few weeks is a point of concern, given that the energy company capped a solid 2017 by reporting fourth-quarter results that were above expectations.
Dominion energy is one of the nation’s largest electric and gas utility company. The firm operates through three segments of Dominion Virginia Power that specializes in regulated electric distribution and regulated energy transmission. The Dominion General segment specializes in regulated electric fleet and merchant electric fleet, while the Dominion Energy segment involves gas transmission and storage as well as gathering and processing.
The diversified product portfolio allows the company to enjoy a competitive edge at a time when the energy industry is enjoying a boom after three years of turmoil.
Despite the recent pullback, the company remains well positioned to enjoy accelerated growth.
SCANA Corporation Acquisition is one of the catalysts that looks set to be a key driver of Domino Energy earnings this year. Expectations are high that the acquisition could push earnings growth, up, from 6% to 8%. The acquisition should also allow Domino Energy to expand its footprint into Carolinas and Georgia
The two states continue to experience population growth which means more customers that Domino energy can target with its products. An increase in customer count is one of the things that position the energy utility company on the path to revenue growth.
In addition to pursuing growth through acquisitions, Domino Energy has also increased its capital spending as it seeks to strengthen its business portfolio. For instance, the company is building a $1.3 billion natural gas power plant in Greensville County.
The company is also looking to spend up to $4 billion to upgrade and expand the life of its nuclear power plants. The spending spree won’t happen in a single year thus providing a runway for continued growth.