Intrinsic value of Dominion Energy Midstream Partners - DM

Previous Close

$30.90

  Intrinsic Value

$4.96

stock screener

  Rating & Target

str. sell

-84%

Previous close

$30.90

 
Intrinsic value

$4.96

 
Up/down potential

-84%

 
Rating

str. sell

We calculate the intrinsic value of DM stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 3.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  19.19
  34.90
  31.91
  29.22
  26.80
  24.62
  22.66
  20.89
  19.30
  17.87
  16.58
  15.43
  14.38
  13.44
  12.60
  11.84
  11.16
  10.54
  9.99
  9.49
  9.04
  8.64
  8.27
  7.94
  7.65
  7.39
  7.15
  6.93
  6.74
  6.56
  6.41
Revenue, $m
  441
  595
  785
  1,014
  1,286
  1,602
  1,965
  2,376
  2,834
  3,341
  3,895
  4,496
  5,142
  5,834
  6,569
  7,347
  8,166
  9,027
  9,929
  10,871
  11,853
  12,877
  13,942
  15,049
  16,201
  17,397
  18,641
  19,933
  21,276
  22,673
  24,125
Variable operating expenses, $m
 
  258
  314
  381
  462
  555
  662
  783
  919
  1,068
  1,232
  1,328
  1,519
  1,723
  1,940
  2,169
  2,411
  2,666
  2,932
  3,210
  3,500
  3,802
  4,117
  4,444
  4,784
  5,137
  5,504
  5,886
  6,282
  6,695
  7,124
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  224
  258
  314
  381
  462
  555
  662
  783
  919
  1,068
  1,232
  1,328
  1,519
  1,723
  1,940
  2,169
  2,411
  2,666
  2,932
  3,210
  3,500
  3,802
  4,117
  4,444
  4,784
  5,137
  5,504
  5,886
  6,282
  6,695
  7,124
Operating income, $m
  217
  337
  471
  633
  824
  1,047
  1,303
  1,592
  1,916
  2,273
  2,663
  3,168
  3,624
  4,111
  4,629
  5,177
  5,755
  6,362
  6,997
  7,661
  8,353
  9,074
  9,825
  10,606
  11,417
  12,260
  13,136
  14,047
  14,993
  15,978
  17,002
EBITDA, $m
  274
  631
  832
  1,075
  1,363
  1,699
  2,084
  2,519
  3,005
  3,542
  4,130
  4,767
  5,452
  6,186
  6,965
  7,790
  8,659
  9,571
  10,527
  11,526
  12,568
  13,653
  14,782
  15,957
  17,177
  18,446
  19,764
  21,134
  22,558
  24,039
  25,580
Interest expense (income), $m
  10
  26
  79
  144
  223
  316
  425
  550
  692
  850
  1,024
  1,215
  1,422
  1,645
  1,883
  2,136
  2,404
  2,686
  2,982
  3,293
  3,617
  3,955
  4,308
  4,675
  5,056
  5,453
  5,865
  6,293
  6,738
  7,200
  7,681
Earnings before tax, $m
  236
  311
  393
  489
  601
  731
  878
  1,042
  1,224
  1,423
  1,639
  1,953
  2,202
  2,467
  2,747
  3,042
  3,351
  3,676
  4,015
  4,368
  4,736
  5,119
  5,517
  5,931
  6,361
  6,808
  7,272
  7,754
  8,256
  8,778
  9,320
Tax expense, $m
  6
  84
  106
  132
  162
  197
  237
  281
  330
  384
  442
  527
  595
  666
  742
  821
  905
  992
  1,084
  1,179
  1,279
  1,382
  1,490
  1,601
  1,717
  1,838
  1,963
  2,094
  2,229
  2,370
  2,517
Net income, $m
  112
  227
  287
  357
  439
  533
  641
  761
  893
  1,039
  1,196
  1,426
  1,608
  1,801
  2,005
  2,220
  2,446
  2,683
  2,931
  3,189
  3,457
  3,737
  4,028
  4,330
  4,643
  4,969
  5,308
  5,661
  6,027
  6,408
  6,804

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  40
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  7,187
  9,595
  12,657
  16,355
  20,738
  25,843
  31,698
  38,320
  45,717
  53,887
  62,823
  72,514
  82,943
  94,095
  105,951
  118,496
  131,715
  145,599
  160,139
  175,333
  191,181
  207,690
  224,869
  242,734
  261,303
  280,600
  300,653
  321,494
  343,159
  365,686
  389,121
Adjusted assets (=assets-cash), $m
  7,147
  9,595
  12,657
  16,355
  20,738
  25,843
  31,698
  38,320
  45,717
  53,887
  62,823
  72,514
  82,943
  94,095
  105,951
  118,496
  131,715
  145,599
  160,139
  175,333
  191,181
  207,690
  224,869
  242,734
  261,303
  280,600
  300,653
  321,494
  343,159
  365,686
  389,121
Revenue / Adjusted assets
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
  0.062
Average production assets, $m
  4,704
  6,346
  8,371
  10,817
  13,715
  17,092
  20,964
  25,343
  30,235
  35,638
  41,548
  47,957
  54,855
  62,230
  70,071
  78,368
  87,110
  96,292
  105,909
  115,957
  126,438
  137,356
  148,718
  160,533
  172,814
  185,576
  198,838
  212,622
  226,949
  241,848
  257,347
Working capital, $m
  22
  61
  80
  103
  131
  163
  200
  242
  289
  341
  397
  459
  525
  595
  670
  749
  833
  921
  1,013
  1,109
  1,209
  1,313
  1,422
  1,535
  1,652
  1,775
  1,901
  2,033
  2,170
  2,313
  2,461
Total debt, $m
  793
  2,245
  4,113
  6,369
  9,042
  12,157
  15,728
  19,767
  24,279
  29,263
  34,714
  40,625
  46,987
  53,790
  61,022
  68,674
  76,738
  85,207
  94,077
  103,345
  113,012
  123,083
  133,562
  144,460
  155,787
  167,558
  179,791
  192,504
  205,719
  219,461
  233,756
Total liabilities, $m
  4,401
  5,853
  7,721
  9,977
  12,650
  15,765
  19,336
  23,375
  27,887
  32,871
  38,322
  44,233
  50,595
  57,398
  64,630
  72,282
  80,346
  88,815
  97,685
  106,953
  116,620
  126,691
  137,170
  148,068
  159,395
  171,166
  183,399
  196,112
  209,327
  223,069
  237,364
Total equity, $m
  2,786
  3,742
  4,936
  6,379
  8,088
  10,079
  12,362
  14,945
  17,829
  21,016
  24,501
  28,280
  32,348
  36,697
  41,321
  46,213
  51,369
  56,784
  62,454
  68,380
  74,561
  80,999
  87,699
  94,666
  101,908
  109,434
  117,255
  125,383
  133,832
  142,618
  151,757
Total liabilities and equity, $m
  7,187
  9,595
  12,657
  16,356
  20,738
  25,844
  31,698
  38,320
  45,716
  53,887
  62,823
  72,513
  82,943
  94,095
  105,951
  118,495
  131,715
  145,599
  160,139
  175,333
  191,181
  207,690
  224,869
  242,734
  261,303
  280,600
  300,654
  321,495
  343,159
  365,687
  389,121
Debt-to-equity ratio
  0.285
  0.600
  0.830
  1.000
  1.120
  1.210
  1.270
  1.320
  1.360
  1.390
  1.420
  1.440
  1.450
  1.470
  1.480
  1.490
  1.490
  1.500
  1.510
  1.510
  1.520
  1.520
  1.520
  1.530
  1.530
  1.530
  1.530
  1.540
  1.540
  1.540
  1.540
Adjusted equity ratio
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  112
  227
  287
  357
  439
  533
  641
  761
  893
  1,039
  1,196
  1,426
  1,608
  1,801
  2,005
  2,220
  2,446
  2,683
  2,931
  3,189
  3,457
  3,737
  4,028
  4,330
  4,643
  4,969
  5,308
  5,661
  6,027
  6,408
  6,804
Depreciation, amort., depletion, $m
  57
  293
  361
  442
  539
  652
  781
  927
  1,090
  1,270
  1,467
  1,599
  1,828
  2,074
  2,336
  2,612
  2,904
  3,210
  3,530
  3,865
  4,215
  4,579
  4,957
  5,351
  5,760
  6,186
  6,628
  7,087
  7,565
  8,062
  8,578
Funds from operations, $m
  292
  520
  647
  799
  978
  1,185
  1,421
  1,687
  1,983
  2,308
  2,663
  3,024
  3,436
  3,875
  4,341
  4,833
  5,350
  5,893
  6,461
  7,054
  7,672
  8,315
  8,985
  9,681
  10,404
  11,155
  11,936
  12,748
  13,592
  14,469
  15,382
Change in working capital, $m
  3
  16
  19
  23
  28
  32
  37
  42
  47
  52
  57
  61
  66
  71
  75
  79
  84
  88
  92
  96
  100
  104
  109
  113
  117
  122
  127
  132
  137
  142
  148
Cash from operations, $m
  289
  505
  628
  776
  950
  1,153
  1,384
  1,645
  1,936
  2,257
  2,607
  2,963
  3,370
  3,804
  4,266
  4,753
  5,267
  5,805
  6,369
  6,958
  7,572
  8,211
  8,876
  9,568
  10,286
  11,033
  11,809
  12,616
  13,455
  14,327
  15,234
Maintenance CAPEX, $m
  0
  -157
  -212
  -279
  -361
  -457
  -570
  -699
  -845
  -1,008
  -1,188
  -1,385
  -1,599
  -1,828
  -2,074
  -2,336
  -2,612
  -2,904
  -3,210
  -3,530
  -3,865
  -4,215
  -4,579
  -4,957
  -5,351
  -5,760
  -6,186
  -6,628
  -7,087
  -7,565
  -8,062
New CAPEX, $m
  -1,277
  -1,642
  -2,025
  -2,446
  -2,899
  -3,376
  -3,872
  -4,379
  -4,892
  -5,403
  -5,910
  -6,409
  -6,898
  -7,375
  -7,841
  -8,297
  -8,743
  -9,182
  -9,616
  -10,048
  -10,481
  -10,918
  -11,362
  -11,815
  -12,281
  -12,762
  -13,262
  -13,783
  -14,328
  -14,899
  -15,498
Cash from investing activities, $m
  -2,123
  -1,799
  -2,237
  -2,725
  -3,260
  -3,833
  -4,442
  -5,078
  -5,737
  -6,411
  -7,098
  -7,794
  -8,497
  -9,203
  -9,915
  -10,633
  -11,355
  -12,086
  -12,826
  -13,578
  -14,346
  -15,133
  -15,941
  -16,772
  -17,632
  -18,522
  -19,448
  -20,411
  -21,415
  -22,464
  -23,560
Free cash flow, $m
  -1,834
  -1,294
  -1,608
  -1,949
  -2,309
  -2,681
  -3,058
  -3,433
  -3,800
  -4,154
  -4,491
  -4,831
  -5,126
  -5,399
  -5,650
  -5,879
  -6,089
  -6,280
  -6,457
  -6,621
  -6,775
  -6,922
  -7,064
  -7,204
  -7,345
  -7,489
  -7,639
  -7,795
  -7,961
  -8,137
  -8,326
Issuance/(repayment) of debt, $m
  57
  1,492
  1,868
  2,256
  2,674
  3,114
  3,572
  4,039
  4,512
  4,984
  5,451
  5,911
  6,362
  6,802
  7,232
  7,652
  8,064
  8,469
  8,870
  9,268
  9,668
  10,070
  10,479
  10,897
  11,327
  11,771
  12,232
  12,713
  13,215
  13,742
  14,295
Issuance/(repurchase) of shares, $m
  1,862
  729
  908
  1,086
  1,270
  1,458
  1,643
  1,822
  1,991
  2,148
  2,289
  2,353
  2,460
  2,548
  2,619
  2,672
  2,709
  2,731
  2,740
  2,737
  2,724
  2,702
  2,672
  2,638
  2,599
  2,556
  2,512
  2,467
  2,422
  2,378
  2,335
Cash from financing (excl. dividends), $m  
  1,885
  2,221
  2,776
  3,342
  3,944
  4,572
  5,215
  5,861
  6,503
  7,132
  7,740
  8,264
  8,822
  9,350
  9,851
  10,324
  10,773
  11,200
  11,610
  12,005
  12,392
  12,772
  13,151
  13,535
  13,926
  14,327
  14,744
  15,180
  15,637
  16,120
  16,630
Total cash flow (excl. dividends), $m
  51
  927
  1,167
  1,392
  1,635
  1,891
  2,157
  2,428
  2,703
  2,977
  3,249
  3,434
  3,696
  3,952
  4,201
  4,445
  4,685
  4,920
  5,153
  5,384
  5,616
  5,850
  6,088
  6,331
  6,580
  6,838
  7,106
  7,385
  7,677
  7,983
  8,304
Retained Cash Flow (-), $m
  -1,283
  -956
  -1,194
  -1,442
  -1,709
  -1,991
  -2,283
  -2,583
  -2,885
  -3,186
  -3,485
  -3,779
  -4,068
  -4,349
  -4,624
  -4,892
  -5,156
  -5,415
  -5,671
  -5,926
  -6,181
  -6,438
  -6,700
  -6,967
  -7,242
  -7,526
  -7,821
  -8,128
  -8,449
  -8,786
  -9,139
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -29
  -27
  -50
  -74
  -100
  -127
  -154
  -182
  -209
  -237
  -345
  -372
  -397
  -422
  -447
  -471
  -495
  -518
  -541
  -565
  -588
  -612
  -637
  -662
  -688
  -715
  -743
  -772
  -803
  -835
Discount rate, %
 
  5.00
  5.25
  5.51
  5.79
  6.08
  6.38
  6.70
  7.04
  7.39
  7.76
  8.14
  8.55
  8.98
  9.43
  9.90
  10.39
  10.91
  11.46
  12.03
  12.63
  13.27
  13.93
  14.63
  15.36
  16.13
  16.93
  17.78
  18.67
  19.60
  20.58
PV of cash for distribution, $m
 
  -27
  -25
  -42
  -59
  -74
  -87
  -98
  -105
  -110
  -112
  -146
  -139
  -130
  -120
  -108
  -97
  -85
  -73
  -63
  -52
  -43
  -35
  -28
  -21
  -16
  -12
  -9
  -6
  -4
  -3
Current shareholders' claim on cash, %
  100
  80.8
  66.2
  55.1
  46.7
  40.1
  34.9
  30.8
  27.5
  24.7
  22.5
  20.7
  19.2
  17.9
  16.8
  15.9
  15.1
  14.4
  13.8
  13.2
  12.8
  12.4
  12.0
  11.7
  11.4
  11.2
  10.9
  10.7
  10.5
  10.4
  10.2

Dominion Energy Midstream Partners, LP, formerly Dominion Midstream Partners, LP, is a limited partnership. The Company is formed to grow a portfolio of natural gas terminaling, processing, storage, transportation and related assets. The Company's segments include Dominion Energy, which consists of gas transportation, liquefied natural gas (LNG) import and storage, and Corporate and Other. The Company owns the preferred equity interests and the general partner interest of Dominion Cove Point LNG, LP (Cove Point). Cove Point's operations consist of LNG import and storage services at the Cove Point LNG Facility and the transportation of domestic natural gas and regasified LNG to Mid-Atlantic markets through the Cove Point Pipeline. The Cove Point LNG Facility includes an offshore pier, regasification facilities and associated equipment required to receive imported LNG from tankers; store LNG in storage tanks; regasify LNG, and deliver regasified LNG to the Cove Point Pipeline.

FINANCIAL RATIOS  of  Dominion Energy Midstream Partners (DM)

Valuation Ratios
P/E Ratio 27.4
Price to Sales 7
Price to Book 1.1
Price to Tangible Book
Price to Cash Flow 10.6
Price to Free Cash Flow -3.1
Growth Rates
Sales Growth Rate 19.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -0.4%
Cap. Spend. - 3 Yr. Gr. Rate 34.1%
Financial Strength
Quick Ratio 1
Current Ratio 0.3
LT Debt to Equity 26.2%
Total Debt to Equity 28.5%
Interest Coverage 25
Management Effectiveness
Return On Assets 2.2%
Ret/ On Assets - 3 Yr. Avg. 3.1%
Return On Total Capital 4.2%
Ret/ On T. Cap. - 3 Yr. Avg. 5.7%
Return On Equity 5.2%
Return On Equity - 3 Yr. Avg. 6.2%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 90.7%
Gross Margin - 3 Yr. Avg. 85.7%
EBITDA Margin 68.7%
EBITDA Margin - 3 Yr. Avg. 65.4%
Operating Margin 49.2%
Oper. Margin - 3 Yr. Avg. 50.5%
Pre-Tax Margin 53.5%
Pre-Tax Margin - 3 Yr. Avg. 52.7%
Net Profit Margin 25.4%
Net Profit Margin - 3 Yr. Avg. 24.8%
Effective Tax Rate 2.5%
Eff/ Tax Rate - 3 Yr. Avg. 12.1%
Payout Ratio 41.1%

DM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DM stock intrinsic value calculation we used $441 million for the last fiscal year's total revenue generated by Dominion Energy Midstream Partners. The default revenue input number comes from 2016 income statement of Dominion Energy Midstream Partners. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our DM stock valuation model: a) initial revenue growth rate of 34.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5%, whose default value for DM is calculated based on our internal credit rating of Dominion Energy Midstream Partners, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Dominion Energy Midstream Partners.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of DM stock the variable cost ratio is equal to 48.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for DM stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Dominion Energy Midstream Partners.

Corporate tax rate of 27% is the nominal tax rate for Dominion Energy Midstream Partners. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the DM stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for DM are equal to 1066.7%.

Life of production assets of 92.3 years is the average useful life of capital assets used in Dominion Energy Midstream Partners operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for DM is equal to 10.2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2786 million for Dominion Energy Midstream Partners - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 99.074 million for Dominion Energy Midstream Partners is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Dominion Energy Midstream Partners at the current share price and the inputted number of shares is $3.1 billion.

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COMPANY NEWS

▶ Stocks With Rising Relative Strength: Dominion Midstreams   [Nov-07-17 03:00AM  Investor's Business Daily]
▶ Dominion Midstreams Trying To Close In On Key Technical Measure   [Nov-02-17 03:00AM  Investor's Business Daily]
▶ Top 10 MLPs Ranked Based on Total Returns   [07:43AM  Market Realist]
▶ Dominion Midstreams Earns Relative Strength Rating Upgrade   [Oct-09-17 03:00AM  Investor's Business Daily]
▶ Top MLP Gainers in Week Ended September 8   [Sep-12-17 08:10AM  Market Realist]
▶ Dominion Energy to Revise Dividend Policy   [Sep-07-17 09:10AM  PR Newswire]
▶ MLP Rating Updates for the Week Ended September 1   [Sep-05-17 03:06PM  Market Realist]
▶ Shareholders Add 'Energy' to Dominion's Name   [May-10-17 11:05AM  PR Newswire]
▶ Midstream Stocks: Which Ones Have the Most Bearish Traders?   [May-04-17 03:04PM  Market Realist]
▶ Dominion Midstream meets 1Q profit forecasts   [08:51AM  Associated Press]
▶ Short Interest: Which Midstream Stocks Could Be Bearish?   [Apr-27-17 04:35PM  Market Realist]
▶ Investors Should Watch These Midstream Stocks   [Apr-20-17 11:46AM  Market Realist]
▶ Why These Midstream Stocks Could Be Bearish   [Apr-13-17 02:35PM  Market Realist]
▶ Why These Midstream Stocks Could Mean Trouble   [Apr-06-17 09:06AM  Market Realist]
▶ How Short Interest Could Impact Midstream Stocks   [Mar-27-17 03:50PM  Market Realist]
▶ Why These Midstream Stocks Could Be Bearish   [Mar-21-17 04:48PM  Market Realist]
▶ These Midstream Stocks Have the Highest Short Interest   [Mar-14-17 01:05PM  Market Realist]
▶ These Midstream Stocks Lead in Short Interest   [Mar-07-17 02:05PM  Market Realist]
▶ Dominion Midstream Partners Submits 2016 10-K Filing   [Feb-28-17 01:00PM  PR Newswire]
▶ Do You Own These Bearish Midstream Stocks?   [12:35PM  Market Realist]
▶ [$$] Dominion Resources Warns of Lower Earnings in 2017   [08:25AM  at The Wall Street Journal]
▶ Alerian Index Series December 2016 Index Review   [Dec-09-16 08:30AM  PR Newswire]
Financial statements of DM
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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