Are you among the U.S. households having to reduce the amount of money spent on groceries in order to manage utility bills?
Last year was the hottest on record. And this year, warm temperatures across the country have led to a higher usage of air conditioners (ACs) to stay cool during the summer months. All of that has resulted in rising utility bills, and it’s forcing Americans to cut back on other expenses…
In a recent CNET survey, 78% of Americans said they’re concerned about increasing home-energy costs. One in three now have to rely on either borrowing money or payment plans just to keep up with the monthly cost of energy bills.
This is a real concern for everyday Americans. And unfortunately, I don’t see it getting better anytime soon.
Beyond energy needs at home, the amount of energy needed to power the artificial intelligence (AI) boom will also drive demand – and supply isn’t coming online fast enough. Power demand hasn’t increased in five years in the United States. But U.S. energy demand is estimated to grow at a 2%-2.5% compound annual rate in the future.
The majority of that increase will come from the data centers supporting the AI trend. They’re expected to make up 7%-10% of all energy demand by 2029 – up from just 2%-3% today.
One of the biggest issues that the U.S. is facing is a subpar electricity grid, which has been in need of upgrades for decades. We’re now at a point where those upgrades can’t be ignored, and billions – if not trillions – of dollars will need to be spent to get the grid up to par.
That creates an opportunity for long-term investors that I’m diving into for my subscribers.
Another arising opportunity that’s often overlooked is the heating, ventilation, and air conditioning (HVAC) sector. Even though prices are rising and people are struggling to keep up with the costs, more are still cranking up their ACs to get through the heat waves.
Approximately 90% of U.S. homes already have ACs, so there isn’t much room for growth there. But newly built homes will still need to be fitted with units, which will keep demand at a solid level. Then there’s replacement and maintenance niche. ACs will need to be tuned up as they’re used more often.
The HVAC sector has performed well over the past five years. As you can see in the chart below, many related stocks have crushed the return of the S&P 500.
You hear the term “100X” thrown around a lot the stock market. I have been lucky enough to recommend several investments that have increased by at least 100X in value throughout my 20-plus year career.
It’s not easy to uncover these stocks. But there are plenty of examples of ones that achieved that feat since 2000. AAON (AAON) and Comfort Systems USA (FIX) – both of which are in the above chart – are in that 100X club.
I’m bringing this up today because most people think the only way to capture a 100X profit is to opt for an extremely risky investment. That’s simply not true. And this is the perfect example…
I wouldn’t consider HVAC stocks as risky investments today or 20 years ago when they began their 100X journey. Now, I don’t see the above stocks going up 100X from current prices at this point. But they still have incredible upside potential as supply will be unable to keep up with energy demand for the foreseeable future.
The stocks included in the chart above may be worth taking a second look – in the comfort of your air-conditioned home, of course.
Here’s to the future,
Matt McCallEditor, Market Insights
The post Soaring Electric Bills Are Hitting Home appeared first on Centurion Publishing.
