What are we looking for?<\/p>\n
Companies working to satisfy the electricity demands of artificial-intelligence<\/a> (AI) data centres, while offering their own shareholders sustainable dividends.<\/p>\n The screen<\/p>\n U.S. President Donald Trump met this week with the heads of Google Inc. GOOG-Q<\/a>, Microsoft Corp. MSFT-Q<\/a>, OpenAI and other major AI players as they formally pledged to keep their power generation costs from trickling through to consumers\u2019 electricity bills.<\/p>\n Those plans likely involve AI players partnering with energy-generation companies to isolate their power needs from power grids focused on serving the public.<\/p>\n The astronomical costs associated with building and supplying AI data centres with the electricity they need is a boon for those companies providing essential construction services and equipment. <\/p>\n With this search, we\u2019re looking for U.S. and Canadian players with the financial strength to reward investors with sustainable and rising income. We\u2019ll then apply our TSI Dividend Sustainability Rating System. It awards points to a stock based on key factors:<\/p>\n one point for five years of continuous dividend payments; two points for more than five; two points if it has raised the payment in the past five years; one point for management\u2019s commitment to dividends; one point for operating in noncyclical industries; one point for limited exposure to foreign currency rates and freedom from political interference; two points for a strong balance sheet, including manageable debt and adequate cash; two points for a long-term record of positive earnings and cash flow sufficient to cover dividend payments; one point for being an industry leader. <\/p>\n Companies with 10 to 12 points have the most secure dividends, or the highest sustainability. Those with seven to nine points have above average sustainability; average sustainability, four to six points; and below average sustainability, one to three points.<\/p>\n More about TSI Network<\/p>\n TSI Network<\/a> is the online home of The Successful Investor Inc. \u2013 the group of widely followed Canadian investment newsletters by editor and publisher Pat McKeough. They include our award-winning flagship newsletter, The Successful Investor, and the TSI Dividend Advisor<\/a>.<\/a> TSI Network is also affiliated with Successful Investor Wealth Management.<\/p>\n What we found <\/p>\n Our TSI Dividend Sustainability Rating System generated six stocks:<\/p>\n Caterpillar Inc. CAT-N<\/a>, based in Irving, Tex., is a leading maker of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and more. The company\u2019s power and energy business serves the fast-growing AI data centre segment. <\/p>\n Hammond Power Solutions Inc. HPS-A-T<\/a>, headquartered in Guelph, Ont., focuses on magnetic transformer design and manufacturing. The company has agreed to buy AEG Power Solutions, which makes high-reliability power supply systems for AI data centres. <\/p>\n Connecticut-based Emcor Group Inc. EME-N<\/a> is a specialty contractor that builds, services and operates critical infrastructure, including data centres. <\/p>\n Eaton Corporation PLC ETN-N<\/a> is headquartered in Dublin, Ireland, but its operational headquarters are in Ohio. The power management company serves the burgeoning data centre market. <\/p>\n Vertiv Holdings Co. VRT-N<\/a>, based in Ohio, manufactures digital infrastructure for data centres, communication networks and commercial and industrial environments; and Houston-based Quanta Services Inc. PWR-N<\/a> is a construction contractor heavily involved in building, upgrading and maintaining data centre electrical infrastructure. <\/p>\n Note that the yields on these stocks are low. That mostly reflects their big gains over the last couple of years as the number of AI data centres balloons.<\/p>\n<\/p>\n Scott Clayton,<\/a> MBA, is senior analyst for TSI Network and associate editor of TSI Dividend Advisor.<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"What are we looking for? 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