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Buy These 4 High-Yielding Utility Stocks Focusing on Renewables
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The United States is expected to see robust demand for electric power from artificial intelligence (AI)-driven data center growth, widespread adoption of electric vehicles (EV), and an increase in residential demand. In this regard, renewable energy is emerging as an industry promising long-term gains. Out of several forms of alternative energy, wind energy is at the forefront of the global transition toward renewable energy, a critical theme in combating climate change.
Here, we have selected four utilities with a growing focus on wind energy. These are: The AES Corp. (AES - Free Report) , DTE Energy Co. (DTE - Free Report) , OGE Energy Corp. (OGE - Free Report) and Xcel Energy Inc. (XEL - Free Report) . Each of these stocks currently carries a Zacks Rank #2 (Buy). At the same time, these companies pay dividends regularly at an attractive rate. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Growing Demand for Wind Energy
Land-based, utility-scale wind turbines provide one of the lowest-priced energy sources available in the market right now. Furthermore, wind energy’s cost competitiveness continues to improve with advances in the science and technology of wind energy.
Apart from being an abundant and inexhaustible resource, wind also provides electricity without burning any fuel or polluting the air. Per the U.S. Department of Energy, wind energy in the country helps avoid 336 million metric tons of carbon dioxide emissions annually, which is equivalent to emissions from 73 million cars.
The demand for wind energy is rising globally. According to a Skyquest report, the global wind energy market size was valued at $87.66 billion in 2023 and is poised to reach $174.67 billion by 2031 from $95.54 billion in 2024, at a compound annual growth rate (CAGR) of 9%.
U.S. Federal incentives like the Inflation Reduction Act (IRA) have bolstered wind energy investments, particularly in offshore wind, which is poised for substantial growth with the expected completion of new large-scale projects. IRA extends and increases investment and production tax credits through 2024 for wind energy projects that begin construction prior to Jan 1, 2025.
Per a U.S. Energy Information Administration report, among other renewable sources, wind is expected to contribute 19% to U.S. electricity generation growth in 2024. Renewables have historically generated maximum electricity in the spring season when the output from wind turbines peaks.
The AES Corp. Stock to Benefit From Strong Wind Energy Focus
The AES Corp. is one of the forerunners in the utility industry's transition to clean energy by investing in sustainable growth and innovative solutions while delivering superior results. In the second quarter of 2024, AES completed the construction or the acquisition of 976 megawatts (MW) of wind, solar and energy storage.
AES signed agreements to support 1.2 GW of new data center load at U.S utilities, 15-year PPAs for 727 MW of wind and solar to serve data center growth in Texas, and 310 MW retail supply to support data centers throughout Ohio. Looking ahead, the AES Indiana subsidiary plans to add up to 1,300 MW of wind, solar and battery energy storage by 2027.
AES has an expected revenue and earnings growth rate of 3.6% and 8.5%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has remained the same over the last 60 days. AES has a current dividend yield of 4.03%.
Image Source: Zacks Investment Research
DTE Energy Moving Steadily Toward Wind Power
DTE Energy Co. is gaining substantially from a clean energy investment push that has received strong policy support following the 2022 U.S. Inflation Reduction Act. DTE has been investing steadily to enhance its renewable generation assets. DTE aims to invest more than $11 billion in clean energy transition over the next 10 years.
Through this solid investment, DTE aims to develop 6,500 MW of solar projects and 8,900 MW of wind projects by 2042. Additionally, it plans to accelerate the development of energy storage, targeting 780 MW through 2030 and 1,830 MW by 2042.
To promote clean energy, DTE has its MIGreen Power program, through which DTE Electric offers its customers the option to voluntarily source their energy usage from renewables. This program aims to substantially accelerate the development of new wind and solar projects across Michigan. As of June 2024, this program had nearly 100,000 residential customer subscriptions.
DTE Energy has an expected earnings growth rate of 16.9% for the current year. Although its revenue growth rate is negative for the current year, it is 4.3% for next year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 60 days. DTE has a current dividend yield of 3.26%.
Image Source: Zacks Investment Research
OGE Energy Stock to Gain on Wind Power Investment
OGE Energy Corp. has been investing steadily to expand its renewable generation assets. As of Dec 31, 2023, the company owned the 120 MW Centennial, 101 MW OU Spirit and 228 MW Crossroads wind farms. It also owns and operates five solar sites across the state of Oklahoma and one in Arkansas, which comes with a cumulative generation capacity of 32.2 MW.
OGE offers the Renewable Energy Credit purchase program, the Green Power Wind Rider and the Utility Solar Program, which are rate options that make renewable energy resources available as a voluntary option to all OG&E Oklahoma retail customers. OG&E aims to continue to deploy more renewable energy sources that do not emit greenhouse gases. Such initiatives should boost OGE Energy’s renewable energy portfolio.
OGE Energy has an expected revenue and earnings growth rate of 29.5% and 3.4%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the last seven days. OGE has a current dividend yield of 4.23%.
Image Source: Zacks Investment Research
Wind Power Moves to Aid Xcel Energy Stock
Xcel Energy Inc. continues to invest substantially in its utility assets to provide reliable services to its customers and effectively meet rising electricity demand. It aims to spend $39 billion during the 2024-2028 time period. Of this, $5.6 billion will be invested in renewables during the said time frame.
After completing six wind projects with 1.5 GW capacities in 2020, XEL completed four wind farms, adding another 800 MW of clean energy generation. XEL received regulatory approval for the Minnesota resource plan, which includes the closing of coal plants like the A.S. King Plant by 2028 and Sherco 3 by 2030.
In 2023, NSP-Minnesota issued an RFP to XEL seeking approximately 1.2 GW of wind power development assets to replace capacity and reutilize interconnection rights associated with the retiring Sherco coal facilities.
Xcel Energy has an expected revenue and earnings growth rate of 2.2% and 6%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has remained the same over the last 30 days. XEL has a current dividend yield of 3.58%.
Image Source: Zacks Investment Research
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Buy These 4 High-Yielding Utility Stocks Focusing on Renewables
The United States is expected to see robust demand for electric power from artificial intelligence (AI)-driven data center growth, widespread adoption of electric vehicles (EV), and an increase in residential demand. In this regard, renewable energy is emerging as an industry promising long-term gains. Out of several forms of alternative energy, wind energy is at the forefront of the global transition toward renewable energy, a critical theme in combating climate change.
Here, we have selected four utilities with a growing focus on wind energy. These are: The AES Corp. (AES - Free Report) , DTE Energy Co. (DTE - Free Report) , OGE Energy Corp. (OGE - Free Report) and Xcel Energy Inc. (XEL - Free Report) . Each of these stocks currently carries a Zacks Rank #2 (Buy). At the same time, these companies pay dividends regularly at an attractive rate. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Growing Demand for Wind Energy
Land-based, utility-scale wind turbines provide one of the lowest-priced energy sources available in the market right now. Furthermore, wind energy’s cost competitiveness continues to improve with advances in the science and technology of wind energy.
Apart from being an abundant and inexhaustible resource, wind also provides electricity without burning any fuel or polluting the air. Per the U.S. Department of Energy, wind energy in the country helps avoid 336 million metric tons of carbon dioxide emissions annually, which is equivalent to emissions from 73 million cars.
The demand for wind energy is rising globally. According to a Skyquest report, the global wind energy market size was valued at $87.66 billion in 2023 and is poised to reach $174.67 billion by 2031 from $95.54 billion in 2024, at a compound annual growth rate (CAGR) of 9%.
U.S. Federal incentives like the Inflation Reduction Act (IRA) have bolstered wind energy investments, particularly in offshore wind, which is poised for substantial growth with the expected completion of new large-scale projects. IRA extends and increases investment and production tax credits through 2024 for wind energy projects that begin construction prior to Jan 1, 2025.
Per a U.S. Energy Information Administration report, among other renewable sources, wind is expected to contribute 19% to U.S. electricity generation growth in 2024. Renewables have historically generated maximum electricity in the spring season when the output from wind turbines peaks.
The AES Corp. Stock to Benefit From Strong Wind Energy Focus
The AES Corp. is one of the forerunners in the utility industry's transition to clean energy by investing in sustainable growth and innovative solutions while delivering superior results. In the second quarter of 2024, AES completed the construction or the acquisition of 976 megawatts (MW) of wind, solar and energy storage.
AES signed agreements to support 1.2 GW of new data center load at U.S utilities, 15-year PPAs for 727 MW of wind and solar to serve data center growth in Texas, and 310 MW retail supply to support data centers throughout Ohio. Looking ahead, the AES Indiana subsidiary plans to add up to 1,300 MW of wind, solar and battery energy storage by 2027.
AES has an expected revenue and earnings growth rate of 3.6% and 8.5%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has remained the same over the last 60 days. AES has a current dividend yield of 4.03%.
Image Source: Zacks Investment Research
DTE Energy Moving Steadily Toward Wind Power
DTE Energy Co. is gaining substantially from a clean energy investment push that has received strong policy support following the 2022 U.S. Inflation Reduction Act. DTE has been investing steadily to enhance its renewable generation assets. DTE aims to invest more than $11 billion in clean energy transition over the next 10 years.
Through this solid investment, DTE aims to develop 6,500 MW of solar projects and 8,900 MW of wind projects by 2042. Additionally, it plans to accelerate the development of energy storage, targeting 780 MW through 2030 and 1,830 MW by 2042.
To promote clean energy, DTE has its MIGreen Power program, through which DTE Electric offers its customers the option to voluntarily source their energy usage from renewables. This program aims to substantially accelerate the development of new wind and solar projects across Michigan. As of June 2024, this program had nearly 100,000 residential customer subscriptions.
DTE Energy has an expected earnings growth rate of 16.9% for the current year. Although its revenue growth rate is negative for the current year, it is 4.3% for next year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 60 days. DTE has a current dividend yield of 3.26%.
Image Source: Zacks Investment Research
OGE Energy Stock to Gain on Wind Power Investment
OGE Energy Corp. has been investing steadily to expand its renewable generation assets. As of Dec 31, 2023, the company owned the 120 MW Centennial, 101 MW OU Spirit and 228 MW Crossroads wind farms. It also owns and operates five solar sites across the state of Oklahoma and one in Arkansas, which comes with a cumulative generation capacity of 32.2 MW.
OGE offers the Renewable Energy Credit purchase program, the Green Power Wind Rider and the Utility Solar Program, which are rate options that make renewable energy resources available as a voluntary option to all OG&E Oklahoma retail customers. OG&E aims to continue to deploy more renewable energy sources that do not emit greenhouse gases. Such initiatives should boost OGE Energy’s renewable energy portfolio.
OGE Energy has an expected revenue and earnings growth rate of 29.5% and 3.4%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the last seven days. OGE has a current dividend yield of 4.23%.
Image Source: Zacks Investment Research
Wind Power Moves to Aid Xcel Energy Stock
Xcel Energy Inc. continues to invest substantially in its utility assets to provide reliable services to its customers and effectively meet rising electricity demand. It aims to spend $39 billion during the 2024-2028 time period. Of this, $5.6 billion will be invested in renewables during the said time frame.
After completing six wind projects with 1.5 GW capacities in 2020, XEL completed four wind farms, adding another 800 MW of clean energy generation. XEL received regulatory approval for the Minnesota resource plan, which includes the closing of coal plants like the A.S. King Plant by 2028 and Sherco 3 by 2030.
In 2023, NSP-Minnesota issued an RFP to XEL seeking approximately 1.2 GW of wind power development assets to replace capacity and reutilize interconnection rights associated with the retiring Sherco coal facilities.
Xcel Energy has an expected revenue and earnings growth rate of 2.2% and 6%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has remained the same over the last 30 days. XEL has a current dividend yield of 3.58%.
Image Source: Zacks Investment Research