Key Takeaways
- Edison International yields 6.6% and Eversource Energy yields 5.0%.
- Edison paid out 51% of its normalized EPS as dividends in fiscal 2025, and consensus puts it at 57% for fiscal 2026, against 63% and 68% at Eversource.
- Edison carries less debt, at 4.0x net debt to EBITDA against Eversource’s 5.6x, but it hadn’t yet estimated its Eaton Fire liability as of its July call.
- Edison trades at 8.9x forward earnings, against a five-year average of 13.0x.
Any income investor shopping for utilities will stop at a 6.6% yield. Edison International (EIX) pays exactly that, and on July 30 it reaffirmed its 2026 guidance for core EPS of $5.90 to $6.20.
The same day, Eversource Energy (ES) reaffirmed its own 2026 guidance of $4.57 to $4.72 in recurring EPS, on a smaller 5.0% yield. It closed the sale of its water business, Aquarion, in the second quarter, while Edison is still working through the Eaton Fire.
Both are regulated utilities that fund their buildout with new debt and stock, so each dividend is judged on its payout ratio of normalized EPS. So which is the better dividend stock?
| Metric | Edison International (EIX) | Eversource Energy (ES) |
|---|---|---|
| Dividend yield | 6.6% | 5.0% |
| Dividend growth, fiscal 2020 to fiscal 2025 | 5.4% a year | 5.8% a year |
| Payout ratio of normalized EPS, fiscal 2025 | 51% | 63% |
| Payout ratio of normalized EPS, fiscal 2026 consensus | 57% | 68% |
| Net debt / EBITDA (LTM) | 4.0x | 5.6x |
| Interest coverage (LTM) | 3.1x | 2.4x |
Edison’s big check is well-covered
Edison’s business is growing. Management expects its rate base to grow about 7% a year over the long term, driven by infrastructure replacement, wildfire mitigation and electrification. Core EPS rose to $1.54 in the second quarter of 2026 from $0.97 a year before, and management reaffirmed 5% to 7% annual core EPS growth from 2025 to 2030, with no new common equity through 2030.
Edison raised its dividend every year from $1.98 a share in fiscal 2016 to $3.36 in fiscal 2025, paying out between 50% and 64% of normalized EPS each year.
Normalized EPS jumped to $6.55 in fiscal 2025 from $4.93 in fiscal 2024, which pulled the payout ratio down to 51%. Consensus has fiscal 2026 EPS at $6.12 against a $3.51 dividend, a well-covered 57%. Management said in April that “we have a commitment to the dividend,” and the numbers back it up.
The risk is wildfire. As of the July 30 call, SCE, Edison’s utility, had extended more than 2,200 offers totaling over $775 million to people affected by the Eaton Fire, and Edison hadn’t yet estimated its total liability.
Eversource is steadier, with a thinner cushion
Eversource has no California wildfire to answer for, and its record is about as steady as a dividend gets. Its dividend rose every year from $1.78 a share in fiscal 2016 to $3.01 in fiscal 2025, as normalized EPS climbed every year from $2.96 to $4.76.
Its payout ratio stayed between 60% and 63% in every one of those years.
The cushion is thinner, though. Eversource paid out 63% of normalized EPS in fiscal 2025, and consensus puts fiscal 2026 at 68%, with EPS of $4.65 against a $3.15 dividend. Transmission earnings fell to $183.7 million in the second quarter of 2026 from $208.0 million a year before, after FERC cut the allowed base ROE from 10.57% to 9.57%.
Chairman and CEO Joe Nolan said the Aquarion sale is “further strengthening our balance sheet,” and management said it brought in $1.7 billion of net proceeds to pay down parent debt. Even so, Eversource still expects to issue $800 million to $1.1 billion of equity over its five-year plan.
So which dividend wins?
Edison International is the better dividend stock. It pays the bigger check, covers it with more room and carries less debt.
$10,000 in Edison at its 6.6% yield pays $660 a year now and, growing at its 5.4% five-year rate, about $1,062 in year 10: a 10.6% yield on your original cash. The same $10,000 in Eversource pays $500 now and about $831 in year 10, an 8.3% yield. At those rates, Eversource’s income wouldn’t pass Edison’s for more than 30 years.
The market already prices in the wildfire risk. Edison trades at 8.9x forward earnings, against a five-year average of 13.0x and a low of 8.0x in June 2025.
That discount is what pushes the yield up to 6.6%.
This isn’t to say Eversource’s dividend is at risk. It has grown faster over five years, at 5.8% a year to Edison’s 5.4%, and its payout ratio hasn’t left a narrow band in a decade. It’s just that, when it comes down to it, Edison’s dividend has more room under it.
Of course, Edison’s case depends on California’s 2026 wildfire legislation. CEO Pedro Pizarro warned on July 30 that if there’s insufficient action, “there’s a strong likelihood that the day after or a few days after, we could see credit rating downgrades for the investor-owned utilities in California.”
So what is Edison International stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
