Dividend Kings In Focus: Consolidated Edison

Up to date on July eighth, 2025 by Nathan Parsh

The Dividend Kings comprise corporations which have elevated their dividends for no less than 50 consecutive years. As a result of their unparalleled streak of annual dividend will increase, it’s common to view the Dividend Kings as among the many greatest dividend development shares available in the market.

You possibly can see the total checklist of all 55 Dividend Kings right here.

We additionally compiled a complete checklist of all Dividend Kings, together with related monetary statistics akin to dividend yields and price-to-earnings ratios. You possibly can obtain the total checklist of Dividend Kings by clicking on the hyperlink under:

Consolidated Edison (ED) is likely one of the newer additions to the Dividend Kings, having raised its dividend for 51 consecutive years.

Over time, utilities have grow to be relied upon for his or her regular dividend payouts, even throughout recessions. This text will analyze the corporate’s enterprise overview, future development prospects, aggressive benefits, and different key points.

Enterprise Overview

Consolidated Edison is a large-cap utility inventory. The corporate generates greater than $15 billion in annual income and has a market capitalization of roughly $36 billion.

The corporate serves roughly 3.7 million electrical prospects and an extra 1.1 million fuel prospects in New York.

Supply: Investor Presentation

It operates electrical, fuel, and steam transmission companies, with a steam system that’s the largest within the U.S.

On October 1st, 2022, Consolidated Edison introduced that it was promoting its curiosity in its renewable power enterprise to RWE Renewables Americas, LLC for $6.8 billion. The transaction closed in 2023. Because of this transaction, Consolidated Edison has not issued frequent inventory in every of the final two years. The corporate had sometimes issued shares for financing frequently up to now.

On Could 2nd, 2025, Consolidated Edison introduced first-quarter outcomes for the interval ending March thirty first, 2025. Throughout the quarter, income elevated 12.1% to $4.8 billion, representing $346 million greater than anticipated.

Adjusted earnings of $792 million, or $2.26 per share, in contrast favorably to adjusted earnings of $742 million, or $2.15 per share, within the earlier yr. Adjusted earnings per share exceeded the analysts’ estimates by $0.07.

As with prior durations, greater charge bases for fuel and electrical prospects had been the first contributors to leads to the CECONY enterprise, which accounts for the overwhelming majority of the corporate’s belongings.

Common charge base balances are anticipated to develop at a median annual charge of 8.2% between 2025 and 2029, up from 6.4% beforehand. Consolidated Edison expects capital investments of practically $38 billion throughout the interval 2025 to 2029.

On its newest convention name, Consolidated Edison reaffirmed its steerage for 2025. The corporate expects adjusted earnings per share in a spread of $5.50 to $5.70 for the yr. On the midpoint, the steerage implies 3.7% development over 2024.

Progress Prospects

Earnings development throughout the utility trade sometimes mimics GDP development. Over the subsequent 5 years, we count on Consolidated Edison to develop its earnings per share by 6.0% yearly.

The corporate has guided for a median annual earnings per share development of 5% to 7% from 2025 ranges via 2029. We consider this development is achievable, provided that share issuances seem to have stopped, coupled with the corporate’s steerage in direction of higher-than-expected charge balances. We observe that this anticipated earnings development charge is above the long-term common charge of three.2%.

ConEd ought to generate stable earnings development every year via a mix of latest buyer acquisitions and charge will increase, helped by the gradual enchancment of the U.S. financial system.

The expansion drivers for Consolidated Edison are new prospects and charge will increase. One advantage of working in a regulated trade is that utilities are permitted to boost charges frequently, which nearly assures a gentle stage of development.

Supply: Investor Presentation

Consolidated Edison anticipates rising its charge base by greater than 8% yearly on common via 2029. It is a pure approach for a utility to generate regular income and earnings development.

One potential menace to future development is excessive rates of interest, which may improve the price of capital for corporations that make the most of debt, akin to utilities.

The Fed has largely maintained rates of interest the place they’re, following decreases, which suggests corporations with heavy debt hundreds are paying much less to finance their capital wants.

Decrease rates of interest assist corporations that rely closely on debt financing, akin to utilities, so traders don’t have to be involved about Consolidated Edison in a falling-rate cycle.

Even when charges stay elevated, Consolidated Edison is in robust monetary situation. It has an investment-grade credit standing of A-, and a modest capital construction with balanced debt maturities over the subsequent a number of years.

A wholesome steadiness sheet and robust enterprise mannequin assist present safety for Consolidated Edison’s dividends.

Traders can fairly count on low single-digit dividend will increase every year, at a charge just like the corporate’s annual adjusted earnings-per-share development.

Aggressive Benefits & Recession Efficiency

Consolidated Edison’s primary aggressive benefit is the excessive regulatory hurdles of the utility trade. Electrical energy and fuel companies are obligatory and very important to society.

Because of this, the trade is extremely regulated, making it nearly inconceivable for a brand new competitor to enter the market. This supplies an excessive amount of certainty to Consolidated Edison.

As well as, the utility enterprise mannequin is extremely recession-resistant. Whereas many corporations skilled important earnings declines in 2008 and 2009, Consolidated Edison carried out comparatively properly. Earnings per share throughout the Nice Recession are proven under:

2007 earnings-per-share of $3.48
2008 earnings-per-share of $3.36 (3% decline)
2009 earnings-per-share of $3.14 (7% decline)
2010 earnings-per-share of $3.47 (11% improve)

Consolidated Edison’s earnings fell in 2008 and 2009 however recovered in 2010. The corporate nonetheless generated wholesome income, even throughout the worst of the financial downturn.

This resilience allowed Consolidated Edison to proceed elevating its dividend every year.

The identical sample held up in 2020 when the U.S. financial system entered a recession because of the coronavirus pandemic. ConEd has remained extremely worthwhile, with file earnings per share in every of the final three years, which has enabled the corporate to boost its dividend yearly.

Valuation & Anticipated Returns

Utilizing the present share worth of roughly $100 and the midpoint of 2025 steerage, the inventory trades at a price-to-earnings ratio of 17.9. That is practically in keeping with our honest worth estimate of 18.0, which is under the long-term common P/E of 18.5.

Because of this, Consolidated Edison shares seem like pretty valued. If the inventory valuation reaches our honest worth estimate, the corresponding a number of enlargement would add 0.2 share factors to annual returns over the subsequent 5 years.

Luckily, the inventory can nonetheless present constructive returns to shareholders via earnings development and dividend funds. We count on the corporate to develop its earnings per share by 6.0% yearly over the subsequent 5 years.

Moreover, the inventory boasts a present dividend yield of three.4%. Utilities like ConEd are prized for his or her steady dividends and secure payouts.

Placing all of it collectively, Consolidated Edison’s complete anticipated returns may attain 8.9% via 2029. It is a stable charge of return, however not excessive sufficient to warrant a purchase suggestion for the time being.

Revenue traders could discover the yield enticing, as the present yield is meaningfully greater than the 1.25% yield of the S&P 500 Index and grows very persistently. The corporate has a projected payout ratio of 61%, which is likely one of the lowest payout ratios for ConEd within the final decade, indicating a sustainable dividend. Nonetheless, dividend development has been on the low aspect, averaging simply above 2% over each the lengthy and medium phrases.

Nonetheless, we charge the inventory a maintain on the present projected charge of return.

Last Ideas

Consolidated Edison could be a priceless holding for earnings traders, akin to retirees, due to its 3.4% dividend yield. The inventory affords safe dividend earnings and can also be a Dividend King, that means it’s anticipated to boost its dividend every year.

Subsequently, risk-averse traders trying primarily for earnings proper now–akin to retirees–may see larger worth in shopping for utility shares like Consolidated Edison. Nonetheless, we charge the inventory as a maintain as a result of projected returns.