Unlocking the Power of AI: How One Utility Stock is Revolutionizing the Industry
The advent of Artificial Intelligence (AI) has brought about a seismic shift in the way businesses operate, creating unprecedented opportunities for growth and wealth creation. One sector that has benefited significantly from AI’s insatiable appetite for power is the utility stock market.
A Hidden Gem in the Utility Sector
Recently, CNBC’s Jim Cramer expressed his enthusiasm for Essential Utilities (NYSE: WTRG), a company that has been flying under the radar despite its immense potential. But what makes Essential Utilities so special?
A Diversified Portfolio
Essential Utilities is one of the largest publicly traded natural gas and water companies in the United States, comprising two main entities: Aqua (water) and Peoples (natural gas). With a customer base of over five million across nine states, the company has a permanently locked-in and lucrative customer base.
The Rise of Natural Gas
However, it’s not the strength of Essential Utilities’ water business that’s exciting investors. Big Tech and data center developers are increasingly looking at natural gas as a potential energy source for AI, due to its ability to meet power needs while having a smaller carbon footprint than traditional energy sources.
Infrastructure in Place
Peoples, Essential Utilities’ natural gas arm, has over 2.5 million miles of natural gas pipelines in place, making it an attractive option for powering AI operations and hyperscale data centers.
Impressive Earnings
Essential Utilities’ Q3 2024 earnings exceeded analysts’ consensus expectations, with revenue reaching $435 million and earnings per share (EPS) of $0.25. The company is predicted to earn $2.37 billion in 2025, representing a 21% increase in revenue over 2024.
A Solid Investment Opportunity
With shares currently trading at $39.67 and paying a solid 3.3% dividend, Essential Utilities appears well-positioned for a strong 2025. Its solid customer base for its water business and potential for growth in its natural gas business make it an attractive option for investors.
High-Yield Opportunities Abound
The changing interest rate environment has created an incredible opportunity for income-seeking investors to earn massive yields through private market real estate investments. Platforms like EquityMultiple offer high-yield opportunities, such as the Ascent Income Fund, which targets stable income from senior commercial real estate debt positions and has a historical distribution yield of 12.1%. With flexible liquidity options and payment priority, these investments are becoming increasingly popular among income-focused investors.
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