2 Dividend Stocks to Double Up on Right Now

The artificial intelligence (AI) buildout is driving a massive infrastructure supercycle, with global data center spending projected to reach $3 trillion by 2030, according to a report from Moody’s. This expansion puts a focus on the pick-and-shovel companies that provide the power and industrial supplies needed to build and maintain these facilities.

Industrial companies, such as Eaton (ETN 5.53%) and W.W. Grainger (GWW +0.02%), also pay dividends, making them solid choices for income investors looking to get in on the AI infrastructure spending boom. Here’s why investors should double up on these dividend stocks today.

Image source: Getty Images.

Eaton’s power and cooling solutions report strong demand

Eaton is an industrial operator seeing unprecedented demand driven by massive infrastructure spending on data centers and the electrification of the grid. The company provides products such as switchgear, transformers, power distribution units, uninterruptible power supplies, and energy storage solutions for customers and is pivoting to focus on megatrends around AI.

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NYSE: ETN

Eaton Plc

Today’s Change

(-5.53%) $-20.87

Current Price

$356.53

Key Data Points

Market Cap

$146B

Day’s Range

$350.76 - $365.92

52wk Range

$231.85 - $408.45

Volume

123K

Avg Vol

3M

Gross Margin

37.58%

Dividend Yield

1.10%

The company aims to build an end-to-end framework to manage power and thermal demands from AI data centers. It spent $9.5 billion to acquire Boyd Thermal, a leader in liquid cooling with engineering teams that work closely with silicon developers. Eaton management forecasts the global liquid-cooling market could grow by 35% annually through 2028.

During the year, Eaton’s total backlog grew to $19.6 billion, driven by strong growth in its electrical Americas segment. On top of that, its data center orders in the fourth quarter surged 200% year over year, illustrating the robust demand for its products.

For income investors, Eaton offers a dividend yield of around 1.1%. The company has paid dividends to shareholders since 1923 and has increased its payout in each of the past 16 years, making it a solid dividend stock that should benefit from the AI infrastructure supercycle.

W.W. Grainger is expanding its product lines in support of data centers and automation

W.W. Grainger is a diversified industrial company that provides a range of products and services to more than 4.6 million customers worldwide. It serves industries such as manufacturing, government, commercial services, and healthcare. The company has over 5,000 suppliers globally and stocks millions of products, giving it strong diversification across suppliers and customers.

The company is capitalizing on the AI boom, and the data center buildout provides the business with a strong tailwind. In support of this, Grainger expanded its product lines to serve data center and factory customers, broadening its automation products, which include sensors, actuators, and machine controls.

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NYSE: GWW

W.W. Grainger

Today’s Change

(0.02%) $0.21

Current Price

$1152.46

Key Data Points

Market Cap

$55B

Day’s Range

$1129.46 - $1155.35

52wk Range

$893.99 - $1218.63

Volume

128K

Avg Vol

297K

Gross Margin

39.06%

Dividend Yield

0.78%

Not only that, but Grainger also adopted AI to drive efficiencies and boost revenue. The company incorporated AI and machine learning to refine its distribution center operations and streamline back-office processes, such as accounts receivable and fraud detection. It also expanded its product selection, using AI to personalize recommendations and leveraging its scale to source products for customers at competitive prices.

Grainger pays a modest dividend yield of around 0.86%, but it is a yield that investors can trust. That’s because the company raised its dividend for each of the past 55 years, making it a member of the exclusive Dividend Kings club. For investors looking for income and upside potential, Grainger is another solid stock to double up on today.