Investing
AI and Data Centers Gobbling Electricity: 4 High-Yield Dividend Utility Stock Bargains
Published:
Due to their continuous operations, data centers consume electricity constantly. These operations involve running large numbers of servers, cooling systems, networking equipment, and other infrastructure. The amount of electricity data centers use varies widely based on size, capacity, efficiency, and geographic location, but the demand is always there.
24/7 Wall St. Key Points:
-
The International Energy Agency expects data centers could use up to 21% of global energy by 2030.
-
Big tech is moving to build small nuclear reactors to aid in electricity production.
-
Some feel that power plants built near enormous reserves like the Permian Basin could make sense.
-
Do you have an allocation of utility stocks in your portfolio? Why not meet with a qualified financial advisor near you for a complete portfolio review? Click here to get started finding one now. (Sponsored)
Trending Video
Large hyperscale data centers, which are increasingly common, require the power of 100 megawatts or more, equivalent to the annual electricity consumption of around 350,000 to 450,000 electric cars. This skyrocketing demand is only expected to continue as the adoption of artificial intelligence (AI) continues to grow. A significant portion of data center energy consumption is attributed to cooling systems that maintain optimal operating temperatures. Big tech will continue to find solutions for this issue.
We decided to screen our 24/7 Wall Street utility stock database, looking for the highest-yielding stocks that could benefit from this massive increase in electricity use. All offer stable and dependable passive income and are rated Buy by top Wall Street firms.
Why are we covering utility stocks?
History shows that stodgy utility stocks will likely hold their ground much better than high-flying technology stocks, especially those chasing AI mania. With a product always in demand and the winter cold here, high-yielding utilities may be the best idea now for worried investors, especially as data center demand cranks up the volume for electricity.
AES
This conservative utility stock offers a hefty 5.30% dividend and considerable upside potential. AES Corp. (NYSE: AES) and its subsidiaries operate as a diversified power generation and utility company in the United States and internationally.
The company owns and operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries; owns and operates utilities to develop or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors; and generates and sells electricity on the wholesale market.
It uses various fuels and technologies to generate electricity, such as:
- Coal
- Gas
- Hydro
- Wind
- Solar
- Biomass
- Renewables comprising energy storage and landfill gas
The company owns and operates a generation portfolio of approximately 34,596 megawatts and distributes power to 2.6 million customers.
Clearway Energy
While very off-the-radar, with a massive 6.45% dividend and the potential for some significant total return, this is a great idea now. Clearway Energy Inc. (NYSE: CWEN) is a renewable energy company. It invests in energy infrastructures, focuses on clean energy, and owns modern, sustainable, and long-term contracted assets across North America.
Its businesses are segregated based on conventional power generation and renewable businesses, which consist of solar, wind, and energy storage. It owns approximately 6,200 net megawatts (MW) of installed wind, solar, and energy storage projects.
The company’s approximately 8,700 net MW of assets also includes approximately 2,500 net MW of natural gas-fired generation facilities.
Clearway Energy’s conventional projects include:
- Carlsbad
- El Segundo
- GenConn Devon
- GenConn Middletown
- Marsh Landing
- Walnut Creek
The company’s utility-scale solar projects include:
- Agua Caliente
- Alpine
- Avenal
- Avra Valley
- Blythe
- Borrego
- Buckthorn Solar
- CVSR
- Daggett 2
- Daggett 3
- Desert Sunlight 250
- Kansas South
The wind projects include Black Rock, Buffalo Bear, and Cedar Creek.
Dominion Energy
Many of the Wall Street firms we cover are still very positive on utilities, and this company pays a strong 4.85% dividend. Dominion Energy Inc. (NYSE: D) operates through four segments:
- Dominion Energy Virginia
- Gas Distribution
- Dominion Energy South Carolina
- Contracted Assets.
The Dominion Energy Virginia segment generates, transmits, and distributes regulated electricity to residential, commercial, industrial, and governmental customers in Virginia and North Carolina.
The Gas Distribution segment engages in
- Regulated natural gas gathering
- Transportation
- Distribution and sales activities
- Distributes nonregulated renewable natural gas
This segment serves residential, commercial, and industrial customers.
The Dominion Energy South Carolina segment:
- Generates
- Transmits
- Distributes electricity and natural gas to residential, commercial, and industrial customers in South Carolina.
The company’s portfolio of assets included approximately:
- 30.2 gigawatts of electric generating capacity
- 10,500 miles of electric transmission lines
- 85,600 miles of electric distribution lines
- 94,200 miles of gas distribution lines
Dominion serves approximately 7 million customers.
Eversource Energy
This conservative stock idea is off the radar and pays a rich 4.95% dividend. Eversource Energy (NYSE: ES) is a public utility holding company that provides energy delivery services.
The company operates through four segments:
- Electric Distribution
- Electric Transmission
- Natural Gas Distribution
- Water Distribution segments
It is involved in transmitting and distributing electricity, solar power facilities, and natural gas.
The company operates regulated water utilities that provide water services to approximately 241,000 customers. It serves residential, commercial, industrial, municipal, and fire protection customers in Connecticut, Massachusetts, and New Hampshire.
Four High-Yield Stocks With 7% and Higher Dividends Are 2025 Home Runs
Are You Still Paying With a Debit Card?
The average American spends $17,274 on debit cards a year, and it’s a HUGE mistake. First, debit cards don’t have the same fraud protections as credit cards. Once your money is gone, it’s gone. But more importantly you can actually get something back from this spending every time you swipe.
Issuers are handing out wild bonuses right now. With some you can earn up to 5% back on every purchase. That’s like getting a 5% discount on everything you buy!
Our top pick is kind of hard to imagine. Not only does it pay up to 5% back, it also includes a $200 cash back reward in the first six months, a 0% intro APR, and…. $0 annual fee. It’s quite literally free money for any one that uses a card regularly. Click here to learn more!
Flywheel Publishing has partnered with CardRatings to provide coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.