The recent heat wave in the country has led to a surge in power demand as people turn up their ACs to stay cool. This increase in power consumption is expected to raise average power bills by about 3% compared to last summer. Additionally, factors like the electrification of the transportation sector and the growth of power-hungry data centers are driving up power demand.
Investors looking to capitalize on this growing demand for power can consider investing in utilities like Dominion Energy, NextEra Energy, and Duke Energy. These companies are expected to generate significant dividend income from the rising power demand.
Dominion Energy, despite a temporary halt in dividend growth due to a recent corporate overhaul, offers an attractive 5.4% dividend yield. The company serves markets in the Southeastern United States, including a rapidly expanding data center market, which supports long-term demand growth.
NextEra Energy, with its large electric utility and clean energy businesses, is well-positioned to benefit from increasing power demand. The company expects 6% to 8% earnings-per-share growth through 2027, allowing for annual dividend increases of around 10%.
Duke Energy, one of the largest electric utilities in the U.S., is projected to experience steady growth in its customer base and earnings through 2028. The company plans to invest heavily in expanding its infrastructure to support this growth, with expectations of 5% to 7% earnings-per-share growth. Duke Energy currently offers a 4% dividend yield, with potential for future growth.
Overall, these utilities present opportunities for investors to earn dividend income from the surging power demand driven by factors like the recent heat wave and the growth of power-hungry industries.