Dominion Resources (D), one of the nations largest producers and transporters of energy, focuses its strategy on electricity and natural gas to customers in the Midwest, Mid-Atlantic and Northeast regions of the U.S., a potential market of fifty million homes and businesses that consumes forty percent of the nation’s energy. Dominion also operates the nation’s largest natural gas storage system with 947 billion cubic feet of storage capacity.
The stock offers a consistent mid-single digit earnings growth rate and a steady stream of rising dividends with a current yield of 4.2%. The stock offers conservative income-minded investors a good place to park some money.
Instead of buying the stock outright, a better play here is to sell the May 19, 2012 50 strike puts for $0.8 for an annualized yield of 19%. If the stock closes under 50 on May 19th, the put seller will own 100 shares of stock for each option sold with the opportunity to generate more income with covered call sales.