10 Under-the-Radar Utility Stocks with Incredible Growth Potential

Unexplored Mundane Business Shares with Remarkable Expansion Prospects

In the ever-evolving world of energy, several key players are making strides in shaping the future. Here's a snapshot of some notable companies and trends that are reshaping the power sector.

Portland General Electric, based on the West Coast, operates in an area where wildfires have been a persistent concern. However, the company's service area includes a crucial landing for international subsea communications cables, offering a unique advantage.

Eversource Energy, operating in the Northeast, passes the cost of power directly on to its customers, and boasts a dividend yield of roughly 4.7%. Meanwhile, its rival, Constellation Energy Corporation, operates the largest nuclear power fleet in the United States but offers a much lower yield of 0.5%.

The growth in electricity demand is set to be driven by artificial intelligence (AI) and data centers, with projections indicating a 300% demand increase over the next decade. Electric vehicles are expected to see an increase in electricity demand of 9,000% between now and 2050, further fueling this growth.

NextEra Energy, the largest utility in Florida, owns solar and wind power assets, providing investors with a solid foundation and a growth platform. The company has increased its dividend at a rapid 10% annualized clip over the past decade. Similarly, Black Hills Corporation, with a customer base growing at nearly twice the rate of the broader U.S. population, has increased its dividend annually for more than five decades.

For those seeking exposure to the utility sector in a diversified manner, the Vanguard Utilities Index Fund ETF (VPU) offers a viable option.

Brookfield Renewable, a one-stop shop for investors in clean energy, has a portfolio spanning hydroelectric, solar, wind, battery storage, and nuclear, providing opportunity for growth beyond just the U.S. market.

The Southern Company, one of the largest utilities in the United States with a focus on the Southeast, has recently started up two nuclear reactors. Dominion Energy, with a dividend yield of 4.7%, has plans to grow, subject to regulatory approval of its capital spending and rates.

Duke Energy, after slimming its business down, is focusing on regulated utility customer bases, which are set to see increased growth thanks to AI, data centers, and electric vehicles.

Lastly, it's worth noting that electricity is projected to grow from 21% of final energy demand to 32% by the middle of the century. This growth is driven by increased industrial electricity demand due to a shift from natural gas to electric heat production, substantial expansion of solar and wind energy capacity, and the necessity of political measures to overcome grid and integration barriers. Additionally, investments in high-tech industries and innovation ecosystems, such as semiconductor technology and photonics, support this growth.

In conclusion, the power sector is undergoing a remarkable transformation, driven by increased demand, technological advancements, and a shift towards sustainability. These trends present exciting opportunities for investors and companies alike.