This utility stock is the standout of its sector and it’s raising its dividend

[Pelican Press 0]

This utility stock is the standout of its sector and it’s raising its dividend

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to power one of the tech giant’s data centers in Virginia, using the utility’s hourly carbon-free energy matching platform. Data center demand, especially as artificial intelligence proliferates, will spur a greater need for electricity – and in particular, carbon-free power to meet environmental policy goals. “Today, it’s not uncommon to see 100-megawatt data centers,” said CEO Joseph Dominguez on the company’s latest earnings call. “And with our clients, we’re talking about data centers that approach 1,000 megawatts, and they require 24/7 power.” And the Street is noticing the power of data center demand. “CEG’s

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has further upside, particularly from higher inflation, higher power prices, and premium pricing for clean/reliable nuclear through 24×7 product and data centers on site,” wrote Steve Fleishman of Wolfe Research on Feb. 28. He rates the stock as outperform and has a price target of $177. “The upside is meaningful,” he added. “For instance, assuming 3% vs 2% inflation raises CEG’s 2028 revenue by $755M.” Potential legislative risk The worry that’s on the mind of investors in companies with a renewable focus is whether the IRA, along with the nuclear production tax credit, could be threatened in the 2024 election. *********** lawmakers have opposed the legislation and have threatened to repeal it. Analysts think that while it’s a possibility, a repeal of the legislation is probably unlikely. “Republicans would have to gain majorities in both Congressional chambers, and come to a consensus on legislation,” wrote UBS analyst Ross Fowler in a March 4 report. “The expiration of the [production tax credit] in 2032 absent renewal also makes it easier to include in any budget reconciliation negotiations.”

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Dividends,Investment strategy,Breaking News: Investing,Utilities,Exelon Corp,Constellation Energy Corp,S&P 500 Index,business news
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