A heat wave has affected much of the country this summer, leading people to use their air conditioners more frequently to stay cool. This increased demand for power is expected to raise the average power bill by about 3% compared to last year. Factors contributing to this rise in power demand include the electrification of the transportation sector, the growth of power-hungry data centers, and other catalysts, all pointing towards a surge in power consumption through the end of the decade.
Investors looking to capitalize on this increasing demand for power can consider companies like Dominion Energy (NYSE: D), NextEra Energy (NYSE: NEE), and Duke Energy (NYSE: DUK) as potential options for generating dividend income. Dominion Energy, in particular, has recently completed a corporate overhaul and is focusing on its electric utility business, offering a high dividend yield of 5.4%. The company serves markets in the Southeastern United States, including a rapidly growing data center market, which bodes well for its future growth prospects.
NextEra Energy, on the other hand, operates the country’s largest electric utility, Florida Power & Light, and has a significant presence in the clean energy sector. The company is well-positioned to benefit from rising power demand and expects to see 6% to 8% growth in adjusted earnings per share through 2027. NextEra Energy has a history of increasing its dividend annually and currently offers a yield of 2.8%.
Duke Energy, one of the largest electric utilities in the U.S., serves nearly 8.2 million customers across six states. The company anticipates continued growth in its customer base and plans to invest $73 billion to expand and modernize its infrastructure, supporting its earnings and dividend growth. Duke Energy currently offers a dividend yield of 4% and is poised to benefit from the potential surge in power demand.
Overall, these companies present compelling investment opportunities for those looking to capitalize on the increasing demand for power and potentially generate strong returns in the future.