Finance

Industrial and utility giants boost dividends as data center tailwinds build

MarketBeat · Jul 21, 2026 15:50 · 5 min read

Industrial and Utility Giants Boost Dividends as Data Center Tailwinds Build — Exterior view of a data center building at dusk with backup generator equipment and electrical transformers in a fenced yard.

Key Points Interested in Cummins Inc.? Here are five stocks we like better. Cummins, Fastenal and Duke Energy have all raised their dividends, giving income investors three different ways to pair cash returns with operating momentum. Cummins and Duke Energy both have data center-related demand drivers, while Fastenal is benefiting from improving industrial activity and market share gains. The group offers a mix of industrial growth, defensive...

Key Points

Interested in Cummins Inc.? Here are five stocks we like better.
Cummins, Fastenal and Duke Energy have all raised their dividends, giving income investors three different ways to pair cash returns with operating momentum.
Cummins and Duke Energy both have data center-related demand drivers, while Fastenal is benefiting from improving industrial activity and market share gains.
The group offers a mix of industrial growth, defensive utility exposure and dividend sustainability, though each stock still carries its own valuation, payout or cyclical risk.

Some of the world's largest players in the industrials and utilities sectors are boosting their dividends. Their dividend increases come alongside solid to strong share price performance in 2026, with multiple names also benefiting from demand tied to data centers and industrial infrastructure. Two names are also in strong shape when it comes to dividend sustainability, while analysts expect the other to significantly improve its position.

Cummins Lifts Dividend 10% as Data Center Demand Pushes Up Shares

Cummins (NYSE: CMI) is widely known for producing heavy-duty truck engines. With a market capitalization of nearly $90 billion, Cummins is one of the top 25 most valuable industrial stocks in the United States. Cummins has displayed very strong performance lately, with a return of almost 50% in 2025 and up more than 20% in 2026.

This is partially due to Cummins selling backup power generators to the data center industry. The company's North American power generation revenue rose 23% last quarter, driven by data center demand, helping offset a 4% decline in its engine business.

Cummins just announced a substantial 10% dividend increase. Its quarterly payout will move up to $2.20, with a record date of Aug. 21 and a payable date of Sept. 3. With this increase, Cummins' forward dividend yield is approximately 1.37%. While not massive, this yield is solidly above the S&P 500 Index's yield of approximately 1%.

Cummins has strong dividend sustainability, with its payout ratio being around 41.5%. Based on current year earnings estimates, analysts expect this figure to improve significantly to about 30%. Overall, Cummins provides a pick-and-shovel play on the data center buildout, with a meaningful yield and a growing, safe dividend.

Fastenal Posts Strongest Growth in Years, Issues Significant Dividend Increase

Fastenal (NASDAQ: FAST) is another giant player in the industrials sector, with a market capitalization of over $50 billion. The company is a distributor of industrial and construction supplies, including fasteners such as bolts, nuts, and screws. Fastenal has posted a solid 13% gain so far in 2026, beating the S&P 500's 10% return. Fastenal posted its fastest revenue growth since 2022 in its latest quarter, with sales rising nearly 15% year over year. The company noted that market conditions have been improving, but emphasized that its market share gains over competitors are driving its success.

Fastenal also returns substantial capital to shareholders. After recently raising its dividend by 8.3%, the company's quarterly payout now sits at 26 cents per share. Additionally, its forward dividend yield comes in at a solid 2.3%. Fastenal plans to pay its next dividend on Aug. 25 to shareholders of record as of the July 28 close.

However, it is worth noting that Fastenal's payout ratio has moved to an uncomfortably high 88%. Still, it is positive to see that, based on next year's estimates, analysts expect the figure to fall very significantly to around 75%. Investors should monitor whether the improvements in Fastenal's business persist and allow the ratio of its dividend payout to earnings to reach this more attractive, yet still elevated, level.

Duke Supports Strong Yield With Latest Dividend Increase

Duke Energy (NYSE: DUK) is one of the U.S.'s largest utility stocks. In fact, with a market capitalization of well over $90 billion, Duke is the third-most-valuable utility stock in the U.S. and the top 10 worldwide. Duke's total return in 2026 sits near 9%, a good showing within the low-volatility utility sector.

Duke achieved a strong 9.7% increase in its adjusted earnings per share (EPS) last quarter, with the figure moving to $1.93. Duke is targeting moderate but steady annual earnings growth of between 5% and 7% through 2030. The company believes it can achieve the top half of that range starting in 2028. This could come as the firm brings on large load capacity, having signed 7.6 gigawatts of Electric Service Agreements with data center customers.

Duke issued a small 1.9% dividend increase. However, the stock's dividend yield is relatively hefty, now near 3.45% on a forward basis. Duke's next $1.085 per share dividend has a record date of Aug. 14 and a payable date of Sept. 16. Duke's payout ratio sits in sustainable territory at around 65%, especially in the context of the utility sector, where payout ratios are often elevated. Based on next year's estimates, analysts forecast the figure to fall to around 60%.

Overall, Duke provides a sizable yield in the defensive utilities sector and is also showing that it can participate in data center-driven upside.

Analysts Eye Gains in Cummins, Engine Business Expectations Increase

Analysts continue to show a solid degree of optimism toward these individual dividend growers. Cummins still has an important datacenter growth angle, but its engine business remains critical. Fastenal is benefiting from improving industrial activity and market share gains, while Duke Energy offers a defensive utility profile with long-term electricity demand from large-load customers.

For income investors, the appeal is dividend growth backed by real operating catalysts, though each stock carries its own risks.

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