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Dominion Energy, Inc. (NYSE:D) has finalized the sale of its subsidiary to Enbridge (NYSE:ENB) Parrot Holdings, LLC, in a $2.0 billion cash transaction accompanied by the assumption of $1.2 billion in debt. The deal, completed on Monday, involved the transfer of all membership interests in Fall North Carolina Holdco LLC, which includes the Public Service Company of North Carolina, Incorporated (PSNC).
PSNC, a key utility in North Carolina, is primarily involved in the natural gas purchase, sale, transportation, and distribution to various customer segments in the state. The sale aligns with Dominion Energy's strategic realignments and was initially announced in a purchase and sale agreement dated September 5, 2023.
The details of this transaction were outlined in a Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on the same date last year. According to the company's Annual Report on Form 10-K for the year ended December 31, 2023, the results of the disposed business were already accounted for as discontinued operations, negating the need for further pro forma financial information in the current report.
The completion of this transaction was officially documented by Dominion Energy's Executive Vice President and Chief Financial Officer, Steven D. Ridge, on October 1, 2024. This news is based on the latest SEC filing by Dominion Energy.
In other recent news, Siemens Energy has agreed to pay $104 million in a US trade secret case, settling allegations of using stolen trade secrets in gas turbine contract bids. The case, dating back to 2019, involved Siemens Energy inflating bids to provide equipment and services to Dominion Energy Inc. Meanwhile, Dominion Energy received a hold rating from Jefferies with a $58 target, reflecting the firm's assessment of Dominion's earnings potential and market position. The firm forecasts a 5.7% EPS CAGR for Dominion Energy from 2025 to 2028 and noted the merchant nuclear Millstone contracting as a potential upside lever for the company's earnings growth.
In other developments, Dominion Energy and Lion Electric have joined forces in Virginia's Electric School Bus Infrastructure program, supporting the transition to electric school bus fleets within the state's public school districts. Dominion Energy also secured offshore wind leases in a recent U.S. government auction and issued $1.2 billion in senior notes. The company's Q2 earnings per share (EPS) of $0.65 surpassed both BMO Capital's and consensus estimates of $0.57, leading BMO Capital Markets to raise its price target on Dominion from $53 to $57.
Lastly, the Nuclear Regulatory Commission (NRC) extended the operating licenses of the North Anna Power Station's two nuclear reactors, allowing them to continue operations until 2058 and 2060. Evercore ISI maintained an In Line rating and a $56.00 price target for Dominion Resources (NYSE:D), following a tour of the company's Charybdis vessel in Brownsville, Texas. Dominion Resources is on track to complete the construction of the vessel between late 2024 and early 2025, which will then support the completion of the Coastal Virginia Offshore Wind (CVOW) project by the end of 2026.
InvestingPro Insights
Dominion Energy's recent $2.0 billion sale of its subsidiary aligns with several key financial metrics and trends highlighted by InvestingPro. The company's market cap stands at $48.89 billion, reflecting its significant presence in the utility sector. Despite the divestiture, Dominion Energy maintains a robust dividend yield of 4.62%, underscoring its commitment to shareholder returns. This is further supported by an InvestingPro Tip noting that the company "Has maintained dividend payments for 42 consecutive years."
The sale's impact on Dominion's debt profile is particularly relevant, given another InvestingPro Tip indicating that the company "Operates with a significant debt burden." The transaction's $1.2 billion debt assumption by the buyer could potentially alleviate some of this pressure. Additionally, with a P/E ratio of 30.85, investors are paying a premium for Dominion's earnings, possibly due to its stable utility business model and consistent dividend history.
Dominion's stock performance has been strong recently, with a 21.82% price total return over the past three months. This aligns with the InvestingPro Tip that the stock is "Trading near 52-week high," currently at 98.81% of its peak. For investors seeking more comprehensive analysis, InvestingPro offers 7 additional tips that could provide further insights into Dominion Energy's financial health and market position.
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