Natural Gas Utilities Poised for Gains from Data Center Construction
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 25 2026
0mins
Source: seekingalpha
- Data Center Drive: The construction of numerous data centers has been a major driver of utility sector gains over the past year, particularly benefiting electric utilities, while natural gas utilities may also see potential, especially as Texas mandates on-site power generation for data centers.
- Natural Gas Turbine Opportunity: Natural gas utilities like Atmos Energy (ATO) and NiSource (NI) operating in Texas and Virginia could benefit from the installation of natural gas turbines at data centers, leading to more attractive valuations and enhanced market competitiveness.
- Xcel Energy Investment Opportunity: Kody's Dividends recommends Xcel Energy (XEL) as the best utility play, projecting a 9% annual diluted EPS growth through 2030, with its current trading price nearly 10% below fair value, making it an attractive investment.
- Attractiveness of National Grid: Wolf Report highlights U.K.-based National Grid (NGG) as a value play with a near-4% yield and double-digit growth rate, indicating resilience against rising interest rates and climate change impacts due to its diversified international exposure.
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Analyst Views on NEE
Wall Street analysts forecast NEE stock price to fall
16 Analyst Rating
12 Buy
4 Hold
0 Sell
Strong Buy
Current: 92.710
Low
84.00
Averages
92.50
High
100.00
Current: 92.710
Low
84.00
Averages
92.50
High
100.00
About NEE
NextEra Energy, Inc. is an electric power and energy infrastructure company. It operates through its wholly owned subsidiaries, NextEra Energy Resources, LLC and NextEra Energy Transmission, LLC (collectively, NEER) and Florida Power & Light Company (FPL). Its segments include NEER and FPL. FPL segment is a rate-regulated electric utility engaged in the generation, transmission, distribution and sale of electric energy in Florida. FPL has approximately 35,052 megawatts of net generating capacity, over 91,000 circuit miles of transmission and distribution lines and 921 substations. The NEER segment owns, develops, constructs, manages and operates electric generation facilities in wholesale energy markets in the United States and Canada and includes assets and investments in other businesses with a clean energy focus, such as battery storage, natural gas pipelines, and renewable fuels. It owns, develops, constructs and operates rate-regulated transmission facilities in North America.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Three Top Dividend Stocks to Buy and Hold Forever
- Automatic Data Processing: Automatic Data Processing (ADP) has raised its per-share dividend for the 51st consecutive year, with a current yield of 2.97%, indicating strong performance in cash flow and shareholder returns, particularly as its diverse HR management services continue to attract investor interest amid the rise of artificial intelligence.
- Digital Realty Trust: Digital Realty Trust (DLR), structured as a REIT with over 300 data centers, may not yet have a strong dividend growth record, but its structure allows for most rental profits to be passed to shareholders, offering a forward-looking yield of 2.7%, making it an appealing option for income-seeking investors.
- NextEra Energy: NextEra Energy (NEE) has raised its dividend annually for 31 years, currently yielding 2.44%, and its investments in renewable energy position it favorably in the future energy market, ensuring ongoing cash flow and shareholder returns as electricity demand continues to rise.
- Market Outlook: These three companies demonstrate significant market potential in their respective fields, with ADP diversifying its HR services, DLR leveraging its data center leasing model, and NEE investing in renewables, all providing investors with confidence for long-term holdings, especially amid increasing economic uncertainty.
See More
Tech Giants Boost Data Center Investments
- Capex Surge: Alphabet is nearly doubling its capex plans for 2026 to between $175 billion and $185 billion, while Meta is increasing its capex by 73% this year to between $115 billion and $135 billion, indicating strong demand for cloud computing and AI from major tech firms.
- Rising Power Demand: NextEra Energy originated 13.5 gigawatts of new generation and battery storage projects last year, its best year ever, and expects to develop 30 gigawatts of projects in the coming years, with a significant portion aimed at meeting data center power needs, highlighting the sector's demand surge.
- Collaborative Data Center Development: NextEra is partnering with Alphabet's Google to develop multiple gigawatt-scale data center campuses and plans to restart the dormant Duane Arnold nuclear power plant in Iowa to meet Google's 3.5 gigawatts power requirement, which will accelerate data center construction.
- Future Growth Expectations: NextEra aims to bring 15 gigawatts of new generation online for data center hubs by 2035, with the CEO expressing a desire to double this goal to 30 gigawatts, which will strongly support the company's future earnings and dividend growth prospects.
See More
NextEra and Exelon Approved for 765 kV Transmission Line
- Project Approval: NextEra Energy and Exelon announced that their proposed 220-mile, 765 kV transmission line project has been approved by the PJM board, marking a significant step forward in the Mid-Atlantic region and expected to enhance electric reliability and affordability.
- Regional Impact: The transmission line will provide increased power capacity for West Virginia, Pennsylvania, and the Mid-Atlantic region to meet rising demand while facilitating new energy generation connections to the grid, thereby strengthening regional power infrastructure.
- Economic Benefits: According to Matt Valle, president of NextEra Energy Transmission, the project will deliver long-term safe, reliable, and affordable power for local residents and the economy, indicating a positive impact on local economic development.
- Future Outlook: Although financial details were not disclosed, the implementation of this project will lay the groundwork for future electricity demand growth, further driving the electrification of the power market and aligning with strategic goals for renewable energy development.
See More
White House Considers Cost Burden on Data Centers
- Cost Internalization for Data Centers: White House trade advisor Peter Navarro stated that data center builders must absorb costs related to electricity and water usage, highlighting the government's concern over economic pressures that could impact companies like Meta.
- Rising Electricity Prices: With electricity prices spiking 6.9% year-over-year in 2025, public anxiety about the economy is increasing, as Navarro attempts to blame former President Biden, indicating the current administration's challenges in addressing inflation.
- Policy Response Measures: The Trump administration has signed a pact with several states urging major tech companies to finance $15 billion for new power plants to alleviate the strain data centers place on the grid, demonstrating proactive government intervention in energy policy.
- Election Outlook Impact: As the November 2026 midterms approach, polls show Democrats leading by 5.2 points, reflecting voter concerns over economic issues that could affect Trump's and the Republican Party's electoral prospects.
See More
NextEra and Exelon Approved for 765 kV Transmission Line
- Project Approval: NextEra Energy Transmission and Exelon Corporation's 765 kV transmission line project, spanning approximately 220 miles, has been approved by the PJM Board, aimed at enhancing electric reliability and affordability in West Virginia, Pennsylvania, and the Mid-Atlantic region.
- Addressing Power Demand: This project will add critically needed capacity to the grid to meet rising electricity demand and ensure that new generation can connect, thereby providing affordable electricity supply for families and small businesses.
- Economic Development Boost: The transmission line is expected to attract industrial investment and foster economic development, creating good-paying jobs during construction and further stimulating local economic growth.
- Community Engagement Commitment: NextEra and Exelon are dedicated to maintaining transparent and meaningful engagement with community members throughout the project process, planning open houses later this year to minimize impacts on landowners and the broader community.
See More
NextEra Energy Declares 10% Dividend Increase to $0.6232
- Dividend Increase: NextEra Energy has declared a quarterly dividend of $0.6232 per share, marking a 10% increase from the previous dividend of $0.5665, demonstrating the company's ongoing commitment to stable cash flow and shareholder returns.
- Yield Performance: The forward yield of 2.63% not only attracts income-seeking investors but also reflects the company's competitiveness in the current market environment, enhancing its appeal to potential shareholders.
- Payment Schedule: The dividend is payable on March 16, with a record date of February 27 and an ex-dividend date also set for February 27, ensuring that shareholders receive timely returns and bolstering investor confidence in the company's financial stability.
- Market Reaction: Despite the dividend increase indicating financial health, market analysts express concerns about NextEra Energy's valuation, suggesting that the company may face risks of being overvalued, which could impact its future investment attractiveness.
See More
Three Top Dividend Stocks to Buy and Hold Forever
- Automatic Data Processing: Automatic Data Processing (ADP) has raised its per-share dividend for the 51st consecutive year, with a current yield of 2.97%, indicating strong performance in cash flow and shareholder returns, particularly as its diverse HR management services continue to attract investor interest amid the rise of artificial intelligence.
- Digital Realty Trust: Digital Realty Trust (DLR), structured as a REIT with over 300 data centers, may not yet have a strong dividend growth record, but its structure allows for most rental profits to be passed to shareholders, offering a forward-looking yield of 2.7%, making it an appealing option for income-seeking investors.
- NextEra Energy: NextEra Energy (NEE) has raised its dividend annually for 31 years, currently yielding 2.44%, and its investments in renewable energy position it favorably in the future energy market, ensuring ongoing cash flow and shareholder returns as electricity demand continues to rise.
- Market Outlook: These three companies demonstrate significant market potential in their respective fields, with ADP diversifying its HR services, DLR leveraging its data center leasing model, and NEE investing in renewables, all providing investors with confidence for long-term holdings, especially amid increasing economic uncertainty.
See More
Tech Giants Boost Data Center Investments
- Capex Surge: Alphabet is nearly doubling its capex plans for 2026 to between $175 billion and $185 billion, while Meta is increasing its capex by 73% this year to between $115 billion and $135 billion, indicating strong demand for cloud computing and AI from major tech firms.
- Rising Power Demand: NextEra Energy originated 13.5 gigawatts of new generation and battery storage projects last year, its best year ever, and expects to develop 30 gigawatts of projects in the coming years, with a significant portion aimed at meeting data center power needs, highlighting the sector's demand surge.
- Collaborative Data Center Development: NextEra is partnering with Alphabet's Google to develop multiple gigawatt-scale data center campuses and plans to restart the dormant Duane Arnold nuclear power plant in Iowa to meet Google's 3.5 gigawatts power requirement, which will accelerate data center construction.
- Future Growth Expectations: NextEra aims to bring 15 gigawatts of new generation online for data center hubs by 2035, with the CEO expressing a desire to double this goal to 30 gigawatts, which will strongly support the company's future earnings and dividend growth prospects.
See More
NextEra and Exelon Approved for 765 kV Transmission Line
- Project Approval: NextEra Energy and Exelon announced that their proposed 220-mile, 765 kV transmission line project has been approved by the PJM board, marking a significant step forward in the Mid-Atlantic region and expected to enhance electric reliability and affordability.
- Regional Impact: The transmission line will provide increased power capacity for West Virginia, Pennsylvania, and the Mid-Atlantic region to meet rising demand while facilitating new energy generation connections to the grid, thereby strengthening regional power infrastructure.
- Economic Benefits: According to Matt Valle, president of NextEra Energy Transmission, the project will deliver long-term safe, reliable, and affordable power for local residents and the economy, indicating a positive impact on local economic development.
- Future Outlook: Although financial details were not disclosed, the implementation of this project will lay the groundwork for future electricity demand growth, further driving the electrification of the power market and aligning with strategic goals for renewable energy development.
See More
White House Considers Cost Burden on Data Centers
- Cost Internalization for Data Centers: White House trade advisor Peter Navarro stated that data center builders must absorb costs related to electricity and water usage, highlighting the government's concern over economic pressures that could impact companies like Meta.
- Rising Electricity Prices: With electricity prices spiking 6.9% year-over-year in 2025, public anxiety about the economy is increasing, as Navarro attempts to blame former President Biden, indicating the current administration's challenges in addressing inflation.
- Policy Response Measures: The Trump administration has signed a pact with several states urging major tech companies to finance $15 billion for new power plants to alleviate the strain data centers place on the grid, demonstrating proactive government intervention in energy policy.
- Election Outlook Impact: As the November 2026 midterms approach, polls show Democrats leading by 5.2 points, reflecting voter concerns over economic issues that could affect Trump's and the Republican Party's electoral prospects.
See More
NextEra and Exelon Approved for 765 kV Transmission Line
- Project Approval: NextEra Energy Transmission and Exelon Corporation's 765 kV transmission line project, spanning approximately 220 miles, has been approved by the PJM Board, aimed at enhancing electric reliability and affordability in West Virginia, Pennsylvania, and the Mid-Atlantic region.
- Addressing Power Demand: This project will add critically needed capacity to the grid to meet rising electricity demand and ensure that new generation can connect, thereby providing affordable electricity supply for families and small businesses.
- Economic Development Boost: The transmission line is expected to attract industrial investment and foster economic development, creating good-paying jobs during construction and further stimulating local economic growth.
- Community Engagement Commitment: NextEra and Exelon are dedicated to maintaining transparent and meaningful engagement with community members throughout the project process, planning open houses later this year to minimize impacts on landowners and the broader community.
See More
NextEra Energy Declares 10% Dividend Increase to $0.6232
- Dividend Increase: NextEra Energy has declared a quarterly dividend of $0.6232 per share, marking a 10% increase from the previous dividend of $0.5665, demonstrating the company's ongoing commitment to stable cash flow and shareholder returns.
- Yield Performance: The forward yield of 2.63% not only attracts income-seeking investors but also reflects the company's competitiveness in the current market environment, enhancing its appeal to potential shareholders.
- Payment Schedule: The dividend is payable on March 16, with a record date of February 27 and an ex-dividend date also set for February 27, ensuring that shareholders receive timely returns and bolstering investor confidence in the company's financial stability.
- Market Reaction: Despite the dividend increase indicating financial health, market analysts express concerns about NextEra Energy's valuation, suggesting that the company may face risks of being overvalued, which could impact its future investment attractiveness.
See More
