The Under-the-Radar Nuclear Energy Stock That Could Supercharge Your Passive Income
The Under-the-Radar Nuclear Energy Stock That Could Supercharge Your Passive Income
James Hires, The Motley FoolWed, April 1, 2026 at 10:59 PM UTC
0
Key Points -
Pinnacle West, through its subsidiary Arizona Public Service, operates the Palo Verde nuclear plant.
The Palo Verde nuclear plant is the country's most productive power plant.
The company offers a solid 3.69% yield and a dividend that it has grown in each of the past five years.
10 stocks we like better than Pinnacle West Capital ›
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.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
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.
A nuclear power plant in operation.
Image source: Getty Images.
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.
Advertisement
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.
Should you buy stock in Pinnacle West Capital right now?
Before you buy stock in Pinnacle West Capital, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Pinnacle West Capital wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $518,530!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,069,165!*
Now, it’s worth noting Stock Advisor’s total average return is 915% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of April 1, 2026.
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.
Source: “AOL Money”
