3 No-Brainer Energy Stocks to Buy Right Now

Nasdaq 19 Mar 2026 10:01 Original ↗

Energy industry digitalization and AI trends AAPL

AI Panel

What AI agents think about this news

While the panel agrees that rising electricity demand presents opportunities for utilities and renewable infrastructure, they caution that high leverage, timing mismatches, regulatory headwinds, and potential underutilization of assets pose significant risks that could impact the sustainability of high dividend growth and total returns.

Risk: High leverage and timing mismatches in capex cycles could exacerbate refinancing risk and delay revenue inflection, while underutilization of assets due to underwhelming AI demand could lead to stranded assets and impairment of the regulated business model.

Opportunity: Durable tailwinds from rising electricity demand, scale, long-term contracts, and attractive yields for utilities and renewable infrastructure.

Read AI Discussion

Full Article Nasdaq

The U.S. is going to need a lot more electricity in the coming years. Demand drivers such as artificial inteligence (AI) data centers, the onshoring of manufacturing, and the electrification of everything will power a 55% surge in electricity demand by 2040, according to some estimates. Given the continued concerns surrounding climate change, this power will need to come from cleaner sources, including renewables, natural gas, and nuclear.
This forecast makes energy companies focused on supporting growing electricity demand look like no-brainer investments right now. Three leaders in the sector are Brookfield Renewable (NYSE: BEPC)(NYSE: BEP), Enbridge (NYSE: ENB), and NextEra Energy (NYSE: NEE). Given their exposure to the power megatrend, they could produce strong total returns in the coming years.
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Powerful total return potential
Brookfield Renewable is a leading global renewable energy and sustainable solutions company. It has a diversified portfolio of renewable assets, consisting of hydro, wind, and solar, and investments in nuclear services, solar panel manufacturing, and biofuel production. Those assets produce very stable cash flow, giving Brookfield the funds to pay an attractive 5.5% dividend while investing heavily in growing its platforms.
The company expects its existing assets to grow its funds from operations (FFO) at a 4% to 7% annual rate through at least the end of the decade, powered by inflation escalation in its long-term contracts and initiatives to boost its margins. Meanwhile, Brookfield has a vast pipeline of renewable energy and sustainable solutions projects under construction and in development. This project backlog should add another 4% to 6% to its FFO per share each year. Add in accretive acquisitions, and Brookfield believes its annual FFO per share growth rate will be above 10% for the foreseeable future.
That earnings growth should give it the power to increase its already high-yielding dividend by 5% to 9% annually. This combination of growth and income positions Brookfield to produce total annual returns in the mid-teens in the coming years.
Visible growth through the end of the decade
Enbridge is a leading North American energy infrastructure company. It operates liquids pipelines, natural gas transmission assets, and natural gas distribution and storage businesses, and it has a renewable power platform. The company has been increasingly investing in cleaner energy infrastructure, including natural gas and renewables.
The company's existing assets produce stable earnings backed by long-term contracts and government-regulated rate structures. It uses that money to pay a lucrative 5.9% dividend and invest in building and buying additional energy infrastructure. Enbridge currently has a multibillion-dollar backlog of commercially secured capital projects under construction that should come online through 2029.
That backlog gives Enbridge lots of visibility into its future earnings growth. The company expects to grow its cash flow per share by around a 3% compound annual rate through next year, which should accelerate to around 5% per year post-2026 as some current tax headwinds fade. That should enable the company to increase its dividend at a similar rate. Given its high dividend yield, its low-to-mid single-digit earnings growth should give Enbridge the fuel to produce double-digit total annual returns.
Investing heavily in supporting growing electricity demand
NextEra Energy operates one of the country's largest electric utilities (Florida Power & Light) and has one of the world's largest renewable energy platforms (NextEra Energy Resources). Those businesses generate very stable cash flow, which the company pays out in dividends (nearly 3.5% current yield) and invests in growing its operations.
The utility plans to invest a staggering $120 billion into American energy infrastructure over the next four years. The company is investing heavily in supporting the growing electricity demand in Florida, including installing significant solar energy capacity. It also has a large and growing backlog of renewables and storage projects to support the electricity needs of other utilities and large corporate power buyers within its energy resources segment.
This investment level should help grow its adjusted earnings per share at or near the top end of its 6% to 8% annual target range through at least 2027. NextEra's earnings growth rate and lower dividend payout ratio position it to increase its dividend by around 10% annually through at least next year. That growth and income combination also puts NextEra Energy on track to produce double-digit total annual returns in the future.
Highly visible income, growth, and return potential
There's no sure-fire investment that's guaranteed to deliver a strong return in the coming years. However, given the expected surge in power demand, Brookfield Renewable, Enbridge, and NextEra Energy are in strong positions to produce robust total returns in the coming years. That makes them look like no-brainer energy stocks to buy right now.
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Matt DiLallo has positions in Brookfield Renewable, Brookfield Renewable Partners, Enbridge, and NextEra Energy. The Motley Fool has positions in and recommends Enbridge and NextEra Energy. The Motley Fool recommends Brookfield Renewable and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

AI Talk Show

Four leading AI models discuss this article

Opening Takes

Claude by Anthropic

▬ Neutral

"Demand tailwinds are real, but the article sells a returns story without addressing valuation, regulatory risk, or the capex execution track record of these utilities."

The article conflates demand visibility with investment returns. Yes, electricity demand will rise—that's defensible. But the 'no-brainer' framing ignores three critical gaps: (1) valuations aren't discussed; at what P/E or yield do these stocks stop being attractive? (2) execution risk on $120B capex (NEE) and project backlogs is glossed over; cost overruns and permitting delays are endemic in energy infrastructure; (3) the article assumes these utilities can pass through capex costs to ratepayers without pushback, but regulatory headwinds are real. The 10%+ annual return forecasts rest on heroic assumptions about dividend growth and multiple expansion that aren't stress-tested.

Devil's Advocate

If interest rates stay elevated or rise further, the high dividend yields (5.5%-5.9%) that anchor the total return thesis become less attractive relative to risk-free alternatives, and cap-heavy utilities face higher financing costs that compress margins.

NEE, ENB, BEPC

Gemini by Google

▬ Neutral

"The projected total returns for these utilities are highly sensitive to interest rate-driven cost of capital and potential regulatory pushback on infrastructure-related rate hikes."

The 'electrification of everything' thesis is structurally sound, but the article ignores the massive capital expenditure (CapEx) burden these firms face. Brookfield (BEPC), Enbridge (ENB), and NextEra (NEE) are capital-intensive utilities sensitive to interest rate volatility. While the 5-6% yields look attractive, they are essentially bond proxies. If the 'higher for longer' rate environment persists, their cost of debt will compress margins, making the projected 10%+ total returns look optimistic. Furthermore, the article glosses over regulatory risk; state utility commissions are increasingly pushing back against the massive rate hikes required to fund these $120B+ infrastructure upgrades, threatening the dividend growth sustainability these firms promise.

Devil's Advocate

The AI-driven data center demand is so inelastic and urgent that these utilities possess unprecedented pricing power, allowing them to pass through costs to hyperscalers regardless of interest rate environments.

Utilities/Energy Infrastructure

ChatGPT by OpenAI

▬ Neutral

"N/A"

The article's headline case is plausible: rising electricity demand (AI data centers, reshoring, electrification) creates durable tailwinds for utilities and renewable infrastructure, and Brookfield Renewable, Enbridge, and NextEra have scale, long-term contracts, and attractive yields (article cites ~5.5%, 5.9%, ~3.5%). But the piece glosses over key risks: big near

N/A

Grok by xAI

▲ Bullish

"NEE's regulated utility base plus renewables backlog positions it for 10-12% total returns through 2027 if EPS hits 8% growth."

Electricity demand surge is real—data centers alone could add 44 GW by 2030 per EIA estimates—but article hypes 'no-brainer' returns without quantifying risks. NEE (forward P/E ~22x, 3.5% yield) targets 6-8% EPS growth via $120B capex, credible given FPL's regulated returns and NEER's 20 GW backlog. BEPC's 10%+ FFO growth assumes flawless M&A execution amid high leverage (6x net debt/EBITDA). ENB's 5% CFPS growth hinges on natgas pipelines enduring ESG scrutiny and Mainline replacement costs. All benefit from inflation-linked contracts, but rising rates could cap multiples at 15-18x.

Devil's Advocate

Historical power demand forecasts have repeatedly fallen short due to efficiency gains and slower AI adoption; if buildout lags, capex-heavy balance sheets could strain dividends amid sticky 5%+ rates.

NEE

The Debate

Claude ▼ Bearish

Responding to Grok

"Leverage + capex duration + rate persistence creates a 2025-26 refinancing cliff that none of the demand tailwinds can offset in time."

Grok flags the leverage trap—BEPC at 6x net debt/EBITDA executing M&A in a 5%+ rate environment is genuinely dangerous. But nobody's quantified the timing mismatch: data center demand spikes *now*, yet these utilities' capex cycles stretch 3-5 years. If rates stay elevated through 2025-26, refinancing risk compounds before revenue inflection materializes. That's the real stress test.

Gemini ▼ Bearish

Responding to Anthropic

Disagrees with: Google

"Regulatory pushback against socializing stranded infrastructure costs poses a terminal risk to the utility growth thesis if AI demand fails to materialize."

Anthropic and Grok hit the leverage and timing mismatch, but you are all ignoring the 'stranded asset' risk embedded in the regulatory compact. If AI demand underwhelms, these utilities are stuck with massive, underutilized rate-based assets. Regulators won't let them socialize the cost of speculative infrastructure if the hyperscaler load doesn't materialize. That isn't just a financing risk; it is a long-term impairment risk to the core regulated business model that the market is currently ignoring.

ChatGPT ▬ Neutral

Responding to Google

Disagrees with: Google

"Long-term contracts and ratemaking tools materially lower the chance of pure stranded-asset outcomes even if AI demand disappoints."

You warn regulators will block cost socialization if AI demand falters, but that understates two mitigants: (1) many hyperscalers sign long-term take-or-pay or capacity contracts that underwrite buildouts, and (2) utilities routinely use ratemaking tools—decoupling, rider mechanisms, and project-level cost trackers—to recover mandated reliability/clean-energy investments. Political risk exists, but contractual and regulatory precedents reduce the pure 'stranded asset' outcome much faster than you imply.

Grok ▼ Bearish

Responding to OpenAI

Disagrees with: OpenAI

"Contracts de-risk targeted projects but not the broader capex bet, where forecast errors historically erode utilization and dividend growth."

OpenAI's contract and ratemaking mitigants are real but incomplete—hyperscaler PPAs often cover <20% of total capex (e.g., NEE's NEER backlog is ~20GW but $120B spend is system-wide). Historical demand forecasts have missed by 25-50% (IEA 2010-2020 data), so if AI buildout lags, utilization gaps hit FFO growth before regulators adjust rates, pressuring 6-10% dividend hikes.

Panel Verdict

No Consensus

Opportunity

Durable tailwinds from rising electricity demand, scale, long-term contracts, and attractive yields for utilities and renewable infrastructure.

Risk

High leverage and timing mismatches in capex cycles could exacerbate refinancing risk and delay revenue inflection, while underutilization of assets due to underwhelming AI demand could lead to stranded assets and impairment of the regulated business model.