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Eversource Energy: A Stable Utility To Buy On Dips

Sep. 19, 2023 4:44 PM ETEversource Energy (ES)DNNGY, DOGEF, DTE, ETR, EXC, FE, IDU7 Comments


  • Eversource Energy is a large utility serving New England that possesses stable cash flows that are not heavily dependent on the strength of the American economy.
  • The company's stock price has weakened due to rising interest rates driving lower appeal of utility stocks.
  • Eversource Energy plans to invest $21.5 billion in infrastructure upgrades to increase its rate base and achieve 5-7% earnings per share growth.
  • The company has a stronger balance sheet than many of its peers, although its net debt-to-equity ratio has been increasing.
  • The 4.20% dividend yield appears to be sustainable and the company's stock appears fairly valued.
  • Looking for a helping hand in the market? Members of Energy Profits in Dividends get exclusive ideas and guidance to navigate any climate. Learn More »

summer sunset in the field (with electric poles)


Eversource Energy (NYSE:ES) is a regulated electric and natural gas utility that serves much of the New England region, including the heavily populated states of Connecticut and Massachusetts. The company also serves much of New Hampshire, but that state

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This article was written by

Power Hedge profile picture

Power Hedge has been covering both traditional and renewable energy since 2010. He targets primarily international companies of all sizes that hold a competitive advantage and pay dividends with strong yields.

He is the leader of the investing group Energy Profits in Dividends where he focuses on generating income through energy stocks and CEFs while managing risk through options. He also provides micro and macro-analysis of both domestic and international energy companie. Learn more.

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Comments (7)


I would be interested in your reaction to the recent commentary from Guggenheim:
"Guggenheim downgraded Eversource (ES) to Neutral from Buy with a $60 price target, cut from $70, saying New York's denial marks a new low in the company's protracted attempt to exit the Sunrise Wind JV, with the decision jeopardizing the fate of the project and even the entire sale process.

The firm thinks Everosurce (ES) shares will continue to trade at a structural discount to the group over "wind execution uncertainty, balance sheet unknowns, Connecticut overhangs, and the overall growth story."
Anyone aware of any plans to modernize Bostons grid? It's not in good shape and it's a big risk from a regulatory view. Alot of 1970s and earlier equipment that is difficult to maintain and Ive seen little to resolve it.
Geoffrey Lordi profile picture
@7380309 Many recent projects have seen substantive local grid improvements surrounding them (granted, some are larger than others): One Congress, DTX (Millennium Tower), One Dalton, the various projects around Fenway, almost the entirety of Causeway, and the mini city that is Seaport. Many of these locations now feature vastly upgraded - and redundant - switching architecture and accommodation for tens to hundreds of chargers for EVs per site (in some cases). In areas like Seaport, the grid is now redundantly hardened against floodwaters - same for renovated properties along the Back Bay, but I don't think yet for the totality of streets there.

Granted, you want to know more about the totality, and no, there is not a single, far reaching project structured around an upgrade. I cannot imagine the intricacies required to make that work among the myriad interested parties.

I live in what barely a decade ago was one of the largest undeveloped areas in the near metro (in CX, near TD Garden) and the electrical infrastructure from the Museum of Science to me is night and day different ... From the expanded metro and bus lines to almost 1,000 EV chargers available in nearby new buildings, entire swaths of the area are immeasurably improved since ~2018.

All of this rosiness aside, like in many cities there are huge areas - many of them simply average residential communities - that need 21st century smart upgrades. Some areas, like Brookline, Watertown, and Waltham upgrade segments when something major fails - or when a large development supplants an old, unused zone (like Waltham's new shopping plaza a few years ago). Some places further out, like Wellesley and Ashland, replace larger swaths (albeit fighting against less population density to do so).

AEP -- debt/equity = 1.52
AEP -- PEG ratio = 2.71
Div Yield = 4.14
dbchambers profile picture
@vskatusa Agree - investing with AEP for my granddaughter. ES has been a well-managed group. I did consulting work with their management team years ago. I would like to see them share more dividends.
Eileen Dover profile picture
Wait for yield to increase to at least 5% along with the others. The best are only around 4.25% now.
A nice idea and I am tempted, since the chart shows a nice opportunity. But knowing they plan on spending a LOT on infrastructure makes me think this chart won't turn the right direction for a while.
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