Dominion Energy is experiencing a surge in demand for electricity across Virginia and the Carolinas, attributed to economic growth, increased electrification, and a boom in data center development. In Virginia, specifically, these data centers are rapidly transforming the area into a key player in the tech industry.
Black Hills, while a smaller and less exciting utility, has carved a niche as a reliable high-yield stock. With a customer growth rate nearly three times that of the U.S. population, the company appears well-positioned to have its investment and rate plans approved by regulators. Black Hills boasts a consistent dividend history, having achieved ‘Dividend King’ status with a robust 55-year dividend streak, and offers a competitive yield of around 4.4%, significantly higher than the average utility yield and the S&P 500.
Dominion Energy outlines ambitious plans to invest approximately $50 billion by 2029 to enhance its lower-carbon energy generation and boost its energy infrastructure’s resilience. This includes over $10 billion allocated for the Coastal Virginia Offshore Wind project, which aims to substantially increase renewable energy production in response to growing demand. Dominion anticipates a 5% to 7% annual growth rate in earnings per share, allowing it to maintain its dividend levels during this heavy investment phase and potentially increase dividends as its earnings grow.
Duke Energy, another key player in the utility sector, has also emphasized its long-term growth plans, targeting similar earnings growth through 2029. The company has paid dividends consistently for 99 years, showcasing a solid track record of delivering value to shareholders. Duke Energy’s extensive plans to invest $83 billion in its infrastructure from 2025 to 2029 seek to modernize operations and accommodate population growth, particularly in regions experiencing high migration and data center expansion.
Overall, the utility sector offers attractive options for investors seeking passive income through dividend stocks, with companies like Dominion, Black Hills, and Duke demonstrating solid growth potential and consistent shareholder returns. As energy demands continue to rise, particularly tied to technology and data centers, these utilities appear poised for sustained performance.