The Under-the-Radar Nuclear Energy Stock That Could Supercharge Your Passive Income

The U.S. Department of Energy has set a goal to triple America's nuclear power generation capacity by the middle of the century. And that won't be as difficult as you might imagine.

In terms of nuclear energy production, the United States leads the pack. In fact, America generates 30% of the world's nuclear power. But nuclear makes up about 18% of the nation's power generation.

The only real issue is time; it takes years to build a new nuclear power plant. That's likely why some power companies have been collaborating with big tech companies to bring decommissioned nuclear plants back online.

Still, it will be years before the ball really gets rolling on expanding American nuclear capabilities further. And that actually makes nuclear power companies prime dividend opportunities.

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Turning the desert green

Pinnacle West Capital Corp. (NYSE: PNW) is a bit of an under-the-radar nuclear play. It's a holding company that controls Arizona Public Service (APS), a utilities company in Arizona.

APS happens to operate the Palo Verde nuclear plant in Arizona. That plant is not only the single largest nuclear plant in the United States, it's also the most productive power plant nationwide.

To any other nuclear power geeks out there, the plant is incredibly cool. It has three reactors, a trait shared by only two other plants and exceeded by only one. Alone, the plant produces 32 million megawatt-hours annually, powering over 4 million homes and businesses in the Southwest.

The company isn't resting on its laurels either, it's working to renew its Palo Verde operating licenses for the next 20 years. It has also partnered up with other Arizona utilities companies, namely the Salt River Project and Tucson Electric Power to explore deploying more nuclear plants in Arizona. Of particular interest to APS are small modular reactors (SMR).

Finally, the company is looking to expand into other clean energy generation opportunities, in particular solar power. The company plans to bring its APS-owned Ironwood Solar Plant in Yuma online this year.

And, because Pinnacle West is a less obvious nuclear power producer, it seems to have avoided the massive run-up in share price other nuclear companies saw in the past year, which killed their yields.

Pinnacle West is only up 7.29% over the past 12 months and so its yield is 3.69% right now, considerably better than most other nuclear power companies like Constellation Energy at about 0.54%.

Its payout ratio is a relatively high but fairly healthy 71.19%, but it has been higher in the past, so the company has brought that back down when it's needed to. It has also raised its dividend for five years in a row.

In addition to its solid yield, the company is fairly healthy, aside from its high debt-to-equity ratio of 2. It runs a net profit margin of 11.83% and it grew its revenue 4.2% over 2024 in 2025. Its net income grew 1.2% over the same period.

Arizona is a growing state that needs more power. That's especially true with companies in the energy-intensive semiconductor industry, like Taiwan Semiconductor Manufacturing, expanding their footprint in Arizona massively over the coming years.

Pinnacle West allows you to profit from both the nuclear renaissance and semiconductor industry growth trends. Consider it for a long-term dividend play.

James Hires has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Constellation Energy and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.