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.
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 is an American utility and power generation company.
This conservative utility stock offers a hefty 5.30% dividend and considerable upside potential. AES Corp. (NYSE: AES | AES Price Prediction) 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
Clearway Energy is one of the largest owners of clean energy generation assets.
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
Dominion Energy is an integrated energy utility. It offers electricity, natural gas, and related services.
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
Eversource is an energy provider serving customers in Connecticut, Massachusetts, and New Hampshire.
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.
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