Energy has come into focus in the U.S. as artificial intelligence (AI) data centers, electrification, and the reshoring of U.S. manufacturing strain an aging grid. Reliability is of the utmost importance and is driving investments into natural gas, nuclear energy, power infrastructure, and grid resilience.
According to a projection from the Bank of America Institute, U.S. electricity demand is expected to have a 2.5% compound annual growth rate over the next decade. This is a rate five times faster than in the prior decade!
Energy and the related infrastructure around it are shifting from a commodity into a strategic asset. As a result, companies owning durable energy assets, infrastructure, and capacity are well-positioned to benefit from growing demand.
The energy landscape is coming into focus, creating opportunities for investors. If you have $3,000 to invest, here are three stocks that could be big winners.
Image source: Getty Images.
This pipeline operator offers a big dividend
Enterprise Products Partners (EPD +0.56%) owns crucial energy infrastructure, including pipelines, storage facilities, and export terminals that transport oil and natural gas across the U.S. The company operates over 50,000 miles of pipelines and earns a steady, fee-based income determined by volume. As a result, it is less affected by swings in commodity prices.
NYSE: EPD
Key Data Points
Known as a midstream operator, Enterprise Products Partners is structured as a master limited partnership (MLP), combining the tax benefits of a partnership with the liquidity of a publicly traded stock. As a pass-through entity, it must return most of its income to investors, making its 6.8% dividend yield highly appealing to those seeking to generate income from their portfolios.
The company is expanding its footprint and has $5.1 billion in capital projects under construction, including processing plants and export terminals. With global energy demand surging and natural gas emerging as a key fuel source, Enterprise Products Partners is positioned for growth.
The growing demand for natural gas is a tailwind for this company
EQT (EQT 2.18%) focuses on the exploration and production of natural gas, as well as the commodity's transportation and sale to utilities, power plants, liquefied natural gas exporters, and other industrial customers.
NYSE: EQT
Key Data Points
Natural gas is a cleaner-burning fuel compared to coal and will play a crucial role in meeting rising energy demand due to its reliability, flexibility, and scalability. As data center projects accelerate, many companies are turning to gas turbines to meet their growing needs. That's because turbines can be deployed in months, not years, and address supply-demand imbalances today.
This is where EQT has its opportunity. Besides the U.S., countries in Europe and Asia are replacing coal with natural gas and reducing their dependence on less reliable energy providers. With the U.S. as the world's largest exporter of natural gas (and only expanding its capacity), EQT is in an excellent position to benefit.
Gain exposure to the growing nuclear infrastructure with this company
Cameco (CCJ +1.70%) mines uranium and provides nuclear-related infrastructure in North America. The company holds controlling stakes in high-grade uranium mines in Canada, owns stakes in mines in Kazakhstan, and holds mining rights to deposits in Australia.
NYSE: CCJ
Key Data Points
What makes Cameco compelling is its position in the nuclear energy industry, which has been gaining favor in recent years. Not only does it mine and process uranium for nuclear fuel, but it also has a 49% ownership stake in Westinghouse Electric (Brookfield Asset Management owns the other 51%).
This matters because Westinghouse is an original equipment manufacturer (OEM) of nuclear reactor technology and a provider of aftermarket products and services to utilities. In October, the parties entered into an $80 billion agreement with the U.S. government to build reactors nationwide.
As nuclear infrastructure is built, Cameco's stake in Westinghouse and its ownership across the nuclear value chain position it well to capture growth. This integration, from uranium supply to reactor services, makes it a compelling way for investors to gain long-term exposure to the expanding global nuclear industry.
