1 Cash-Rich Utility Retirees Can Count On to Protect Their Future Financial Plans
The post 1 Cash-Rich Utility Retirees Can Count On to Protect Their Future Financial Plans appeared first on 24/7 Wall St..
- Consolidated Edison (ED) raised dividends for 52 consecutive years; yields 3.17% with 58% payout ratio; 8.8% rate base growth through 2030.
- Con Ed's dividend remains safe despite $4.8B capex needs and elevated leverage, as regulated utility cash flows and management confidence on grid investments back the streak.
- Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Consolidated Edison didn't make the cut. Grab the names FREE today.
Few stocks earn their place in a retiree’s portfolio the way Consolidated Edison (NYSE:ED) has. The New York utility delivers electricity, gas, and steam to roughly 3.7 million electric customers across the country’s busiest commercial district and just notched its 52nd consecutive year of dividend increases. Is that streak built to last another decade?
Dividend Snapshot
| Metric | Value |
|---|---|
| Annual Dividend | $3.55 per share |
| Dividend Yield | 3.17% |
| Consecutive Years of Increases | 52 years |
| Most Recent Increase | 4.4% (January 2026) |
| Dividend King Status | Yes |
Payout Ratios Leave Room, but Free Cash Flow Is the Catch
Con Ed paid $1.166 billion in dividends in 2025 against $4.8 billion in operating cash flow, an OCF payout ratio of just 24.3%. On an earnings basis, the $5.93 trailing EPS easily covers the $3.55 payout, and management’s 2026 adjusted EPS guidance of $6.00 to $6.20 drops the forward earnings payout ratio near 58%.
| Metric | Value | Assessment |
|---|---|---|
| Earnings Payout Ratio (TTM) | ~60% | Healthy |
| Forward Earnings Payout Ratio | ~58% | Healthy |
| OCF Coverage | 4.1x | Strong |
The catch: capex hit $4.764 billion in 2025, leaving free cash flow flat and historically negative. Like every regulated utility, Con Ed funds growth with fresh debt and equity, which is why the FCF payout ratio is not a clean signal here.
Leverage Is Elevated and Moody’s Is Watching
| Metric | Value | Assessment |
|---|---|---|
| Total Liabilities / Equity | $50.4B / $24.2B | Aggressive (utility norm) |
| EV/EBITDA | 10.47x | Manageable |
| Cash on Hand (Q1 2026) | $147M | Thin |
| Credit Outlook | Moody’s Negative | Watch item |
Con Ed is funding its $6.6 billion 2026 capex plan with up to $1.1B in common equity and $3.2B in long-term debt. That dilution is the price retirees pay for grid investment.
The Streak: 52 Years and Counting
| Year | Annual Dividend |
|---|---|
| 2026 | $3.55 |
| 2025 | $3.40 |
| 2024 | $3.32 |
| 2023 | $3.24 |
| 2022 | $3.16 |
The 5-year CAGR sits near 3%, barely ahead of the recent CPI run rate. The 2026 hike of 4.4% is the largest in years.
Management Sounds Confident on the Investment Cycle
CEO Tim Cawley framed the setup on the Q1 2026 call: “Our first-quarter results reflect the strength and durability of our regulated businesses, with reaffirmed adjusted earnings per share guidance driven by continued operational excellence and industry-leading reliability.” Reaffirmed guidance after a Q1 EPS miss signals confidence. The dividend isn’t in question.
The Verdict: Safe With Caveats
Dividend Safety Rating: Safe. A 58% forward payout ratio, an 8.8% rate base CAGR through 2030, and 52 years of raises make a cut unlikely. Con Ed works for income if you want New York regulated cash flows and a yield that beats most bond ladders after tax. The risk to monitor: if rates stay near 4.49% on the 10-year and Moody’s downgrades, equity dilution would accelerate. For a retiree’s core income sleeve, this dividend earns its keep.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Consolidated Edison didn’t make the cut. Grab the names FREE today.
The post 1 Cash-Rich Utility Retirees Can Count On to Protect Their Future Financial Plans appeared first on 24/7 Wall St..
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