With a 4% Dividend Yield and Significant Growth Potential, This Stock Is a Buy [Video]

WEC Energy Group WEC got some good news last month: Microsoft intends to significantly expand its data center campus in southeastern Wisconsin, which is the utility’s territory. We think this narrow-moat company is one of the best-positioned utilities to benefit from AI-driven data center growth—and the stock is trading at a big discount to our $96 fair value estimate. This attractive dividend stock appears on our list of the Best Utilities Stocks to Buy; it’s also among Morningstar chief US market strategist Dave Sekera’s 5 Undervalued Stocks to Buy as Their Stories Play Out.

WEC Energy is the largest Midwest utility. Nearly 75% of its earnings comes from areas with constructive state and federal regulation. Its regulated-like commercial renewable energy business accounts for the remainder. In Wisconsin, the company enjoys rates based on two-year forward test years and an earnings-sharing mechanism over its allowed return on equity. Average allowed ROE tops 9.8% at WEC’s subsidiaries …