Many investors like utility companies because customers likely only have one choice on where to get their electric power: their local electric company.  Utility companies are highly regulated and are forced to comply with rules set forward by federal, state and local governments, making these companies legal monopolies. This advantage allows many utility companies to pay attractive yields while also raising their dividend aggressively. One company that fits this description is Dominion Energy (D).

Dominion Energy, based in Virginia, has electric generation capacity of 25,000 megawatts and operates 15,600 miles of gas pipelines. Dominion serves more than six million customers across eight states.  Unlike other utility companies, Dominion acquires a large portion of operating earnings from non-utility operations. This includes the company’s Cove Point LNG export facility and the Atlantic Coast Pipeline.

Cove Point, located in Maryland, begin exporting natural gas at the end of February. The $4-billion-dollar project is a joint venture between two large natural gas companies in Japan and India. Each will receive 50% of Cove Point’s capacity over the next 20 years. The Atlantic Coast Pipeline, of which Dominion owns 48%, will transport natural gas from the Marcellus and Utica shale gas fields of Ohio, West Virginia, Pennsylvania and New York to utility companies in North Carolina and Virginia. Within the next few years, it is estimated that nearly half of Dominion’s earnings will come from nonutility operations.

Dominion agreed to purchase SCANA (SCG), but the situation is complicated due to SCANA’s V.C. Summer project.  Dominion will only complete the transaction if they are allowed to recover the costs of the failed nuclear power project. The South Carolina state legislature is under pressure from their constituents not to allow this to happen as this will keep rates higher. Dominion did agree to give $1,000 to each of SCANA’s 700,000 residential customers after completion of the agreement.

Besides these exciting developments, Dominion has seen its earnings growth accelerate in recent years. The company has grown earnings per share at a very utility-like rate of just 2.9% over the last decade. Over the last five years, however, that earnings growth rate jumps to 5.5%. Dominion released first quarter earnings results on April 27^th. The company earned $1.14 per share, a 17.5% improvement from the previous year and $0.08 above estimates.  Revenue grew 2.7% year over year to $3.5 billion, though this was $50 million below expectations.

Dominion has increased its dividend by an average of 8.6% per year over the last ten years. Even better, management has a stated goal to increase its dividend by at least 10% through 2020. On December 15 of last year, Dominion followed through on its dividend promise and gave shareholders a 10% dividend raise. Dominion currently yields 4.8%. Very few other utility companies can offer this combination of earnings and dividend growth.

Dominion’s stock closed at $69.99 on Friday, down almost 14% for the year. Based off of expected earnings per share of $4.03 for 2018, shares trade with a forward price to earnings multiple of 17.4. Over the last decade, Dominion’s stock has a multiple of 16.5. If the stock were to revert to its normal valuation by 2023, then shares would experience a multiple reversion of just 1.1% annually over the next five years.

With several non-utility operations set to contribute to earnings for multiple decades, Dominion is more than just a utility company. The company has a solid earnings growth rate in recent years and just gave investors a 10% dividend increase. Shares are down for the year, but this could be an excellent opportunity for investors to pick up this high growth, high yield utility company.