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.
The numbers are staggering as data centers collectively account for a notable portion of global electricity usage. Estimates suggest that data centers worldwide consumed around 200 terawatt-hours (TWh) of electricity in 2020, which is about 1% of global electricity demand. Experts think that the figure has increased dramatically since then.
We decided to screen our 24/7 Wall St. 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 all are rated Buy at top Wall Street firms.
Why are we covering utility stocks?
The S&P 500 utilities sector has gained nearly 19% from its low in mid-February and has outperformed the large-cap benchmark index by 3%. Equities will be hit if the major stock market indices significantly decline. However, history shows that stodgy utility stocks will likely hold their ground much better than high-flying technology stocks, especially those chasing Artificial Intelligence mania.
With a product always in demand and the summer heat right around the corner, high-yielding utilities may be the best idea now for worried investors.
Black Hills
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This Dividend King is way off the radar for many but is among the safest plays now and pays a hefty 4.56% dividend. Through its subsidiaries, Black Hills Corp. (NYSE: BKH) operates as an electric and natural gas utility company in the United States.
It operates in two segments:
- Electric Utilities
- Gas Utilities
The Electric Utilities segment generates, transmits, and distributes electricity to approximately 220,000 electric utility customers in:
- Colorado
- Montana
- South Dakota
- Wyoming
The company also owns and operates 1,482 megawatts of generation capacity and 0,024 miles of electric transmission and distribution lines.
The Gas Utilities segment distributes natural gas to approximately 1,107,000 natural gas utility customers in:
- Arkansas
- Colorado
- Iowa
- Kansas
- Nebraska
- Wyoming
In addition, the company owns and operates 4,713 miles of intrastate gas transmission pipelines, 42,222 miles of gas distribution mains and service lines, seven natural gas storage sites, approximately 50,000 horsepower of compression, and 515 miles of gathering lines.
Black Hills also constructs and maintains gas infrastructure facilities for gas transportation customers, provides appliance repair services to residential utility customers, and constructs electrical systems for large industrial customers.
Lastly, it produces electric power through wind, natural gas, coal-fired generating plants, and coal at its coal mine near Gillette, Wyoming.
Canadian Utilities
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With a strong 5.72% dividend and residing in a highly safe sector, this stock is a steal at current trading levels. Canadian Utilities Ltd. (OTC: CDUAF) engages in the electricity, natural gas, renewables, pipelines, liquids, and retail energy businesses in Canada, Australia, and internationally.
It operates through three segments:
- ATCO Energy Systems
- ATCO EnPower
- Corporate & Other segments
The ATCO Energy Systems segment provides regulated electricity transmission and distribution services in:
- Northern and central east Alberta
- The Yukon
- The Northwest Territories
- The Lloydminster area of Saskatchewan
This segment also provides integrated natural gas transmission and distribution services in Alberta, the Lloydminster area of Saskatchewan, and Western Australia. It owns and operates approximately 9,100 kilometers of natural gas pipelines, 11 compressor sites, approximately 3,600 receipt and delivery points, and a salt cavern natural gas storage peaking facility near Fort Saskatchewan, Alberta in Canada.
The ATCO EnPower segment provides:
- Hydro
- Solar
- Wind
- Natural gas electricity generation
- Natural gas storage
- Industrial water solutions
- Clean fuels, including hydrogen, carbon capture, and underground storage projects; and related infrastructure development in Alberta, the Yukon; the Northwest Territories, Australia, Ontario, Mexico, and Chile
The Corporate & Other segment retails electricity and natural gas, and it provides whole-home solutions.
Dominion Energy
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Many of the Wall Street firms we cover are still very positive on utilities, and this company pays a strong 5.03% 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
Duke Energy
Source: Joe Raedle / Getty Images News via Getty Images
This is another excellent idea now, located in a growing part of the country and paying a hefty 4% dividend. Duke Energy Corp. (NYSE: DUK) and its subsidiaries operate as an energy company in the United States.
It operates through two segments:
- Electric Utilities and Infrastructure (EU&I)
- Gas Utilities and Infrastructure (GU&I)
The EU&I segment generates, transmits, distributes, and sells electricity in the Carolinas, Florida, and the Midwest.
To develop electricity, Duke Energy uses the following:
- Coal
- Hydroelectric
- Natural gas
- Oil
- Solar and wind sources
- Renewables
- Nuclear fuel
This segment also sells electricity to municipalities, electric cooperative utilities, and load-serving entities.
The GU&I segment distributes natural gas to
- Residential
- Commercial
- Industrial
- Power generation natural gas customers
The segment also invests in pipeline transmission projects, renewable natural gas projects, and natural gas storage facilities.
Entergy
Source: nrcgov / Flickr
This top utility stock always makes sense for conservative investors and pays a rich 4.04% dividend. Together with its subsidiaries, Entergy Corp. (NYSE: ETR) produces and distributes electricity in the United States.
It operates in two segments,
- Utility
- Entergy Wholesale Commodities
The Utility segment generates, transmits, distributes, and sells electric power in portions of:
- Arkansas
- Louisiana
- Mississippi
- Texas
- And the City of New Orleans
The company also distributes natural gas.
The Entergy Wholesale Commodities segment is involved in:
- The ownership, operation, and decommissioning of nuclear power plants located in the northern United States
- Sale of electric power to wholesale customers
- Provision of services to other nuclear power plant owners
- Ownership of interests in non-nuclear power plants that sell electric power to wholesale customers
The company generates electricity through gas, nuclear, coal, hydro, and solar sources. It sells energy to retail power providers, utilities, electric power co-operatives, power trading organizations, and other power generation companies.
Its power plants have approximately 24,000 megawatts (MW) of electric generating capacity, which includes 5,000 MW of nuclear power.
The company delivers electricity to 3 million utility customers in Arkansas, Louisiana, Mississippi, and Texas.
Exelon
Source: Scott Olson / Getty Images
This top utility stock makes good sense now for conservative accounts and pays a dependable 4.04% dividend. Exelon Corp. (NYSE: EXC) is a utility services holding company engaged in the energy distribution and transmission businesses in the United States and Canada.
The company purchases and regulates retail sales of electricity and natural gas and the transmission and distribution of electricity and natural gas to retail customers.
It also offers support services, including:
- Legal
- Human resources
- Information technology
- Supply management
- Financial
- Engineering
- Customer operations
- Distribution and transmission planning
- Asset management
- System operations
- Power procurement services
The company serves:
- Distribution utilities
- Municipalities
- Cooperatives
- Financial institutions
- Commercial, industrial, governmental, and residential customers
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