The Smartest Dividend Stocks to Buy With $1,000 Right Now

Many believe that artificial intelligence (AI) will become the most impactful technology in history. However, to realize its great promise, AI will require a massive infrastructure buildout to support its adoption. That's opening the doors to a once-in-a-generation investment opportunity.

NextEra Energy (NYSE: NEE) and Prologis (NYSE: PLD) are ramping up their investments to capitalize on the AI infrastructure investment megatrend. These investments should increase their earnings, enabling them to continue hiking their dividends. That visible growth makes them some of the smartest dividend stocks you can buy with $1,000 right now.

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Plugged into a powerful megatrend

AI data centers require a tremendous amount of power to run the specialized chips and cooling systems at the capacity needed to support this technology. As a result, U.S. power demand will surge in the coming years. Forecasters expect U.S. electricity demand will rise 58% over the next 20 years, a six-fold increase in the growth rate from the past two decades.

NextEra Energy is the country's largest electric utility and a leader in developing clean energy infrastructure. It's rapidly becoming a key partner to technology companies, supporting their growing power needs. For example, it recently signed deals to supply Meta Platforms with more solar energy and battery storage capacity and a nuclear power deal with Google. The company is also partnering with Google to jointly develop large-scale data centers and the power infrastructure needed to support them.

The power company expects its heavy investments to drive annual earnings-per-share growth of more than 8% over the next decade. That supports NextEra's plan to hike its 2.5%-yielding dividend by another 10% this year and grow it by 6% annually in 2027 and 2028. This growth could enable the company to deliver powerful total returns in the coming years.

Diversifying into data centers

Prologis is one of the largest real estate investment trusts (REITs) in the world. It primarily invests in warehouses. It's also a leader in installing solar power at its facilities to support its customers' energy needs.

The REIT has begun leveraging its expertise in constructing powered building shells to develop data centers. Prologis sees the potential to invest $30 billion to $50 billion into building up to 10 GW of data center capacity over the next decade. The company estimates it could create $7.5 billion to $25 billion in value for investors by developing data centers, given their much higher returns than building new warehouses.

Prologis' strategy to diversify into developing data centers could pay big dividends for investors. It could enable the REIT to continue growing its earnings and dividend at above-average rates. With a nearly 3% current yield, Prologis could deliver robust returns as it capitalizes on the $7 trillion data center construction boom.

Wise investments

NextEra Energy and Prologis plan to invest heavily to capitalize on the AI infrastructure megatrend. These investments should drive strong earnings and dividend growth, enabling these companies to deliver robust total returns. That high total return potential makes them look like some of the smartest dividend stocks to buy with $1,000 right now.

Matt DiLallo has positions in Alphabet, Meta Platforms, NextEra Energy, and Prologis. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, NextEra Energy, and Prologis. The Motley Fool has a disclosure policy.