2 Utility Stocks to Buy in February

Core Insights - The utility sector has shown strong performance, with the Vanguard Utilities Index Fund ETF increasing by over 11% in the past year, driven by rising power demand related to AI [1] - The early stages of the AI power surge are expected to significantly boost utility growth in the coming years, with NextEra Energy and Dominion Energy identified as top stocks to capitalize on this trend [2] NextEra Energy - NextEra Energy operates the largest electric utility in the U.S. (Florida Power & Light) and is a leader in renewable energy infrastructure [4] - The company reported an adjusted earnings per share growth of over 8% in 2025, supported by Florida's growth and strong renewable energy demand [5] - NextEra Energy added 8.7 gigawatts of new generation and storage projects last year and secured a record 13.5 gigawatts of new projects, increasing its backlog to 30 gigawatts [5][7] - The company anticipates an annual earnings per share growth rate of over 8% through 2035, supporting a planned 10% dividend increase this year and 6% increases in 2027 and 2028 [7] Dominion Energy - Dominion Energy operates electric utilities in Virginia and the Carolinas, heavily investing to meet the growing power demand, particularly in Virginia, which is the largest data center hub globally [8][10] - Power demand in Virginia surged by 30% last year, with Dominion planning to supply up to 47 gigawatts of power to data centers, a 17% increase from the previous year [10] - The company plans to invest $50 billion between 2025 and 2029 to enhance its utility operations, with significant investments in the Coastal Virginia Offshore Wind project, expected to deliver nearly 3 gigawatts of power [11] - Dominion aims for 5% to 7% annual earnings per share growth, alongside maintaining its dividend yield of over 4% during this investment phase, potentially leading to double-digit total annual returns [12] Investment Outlook - Both NextEra Energy and Dominion Energy are positioned to benefit from the anticipated AI power surge, which is expected to drive healthy earnings growth and strong total shareholder returns through dividends [13]