Key Takeaways
- At today’s prices, $1,000 a month in dividends takes 3,381 shares of Consolidated Edison, 2,765 of Duke Energy or 3,093 of American Electric Power.
- Duke Energy’s 3.4% yield makes it the cheapest route, about $46,500 less than Con Edison, but its dividend took the biggest share of earnings: 67% of fiscal 2025 normalized EPS.
- AEP expects to raise its dividend about 2% a year while it funds a $100 billion capital plan, and Con Edison raised its dividend 4.4% this year with a 60% payout ratio.
- Con Edison’s check is the best covered of the three, which makes it worth the extra cost for a retiree who wants the surest income.
Any retiree hunting for a dividend check they can count on is going to look at utilities like Consolidated Edison (ED), Duke Energy (DUK) and American Electric Power (AEP). All three have raised their dividends this year.
So let’s take a hypothetical retiree who wants $1,000 a month from just one of them. (Of course, no one should ever put a whole retirement into one stock.) At today’s prices, Duke gets there for about $46,500 less than Con Edison, and AEP lands in between:
| Metric | Shares for $1,000 a month | Cost | Dividend a share, a year | Yield | Payout ratio of normalized EPS, fiscal 2025 | Fiscal 2026 consensus |
|---|---|---|---|---|---|---|
| Consolidated Edison (ED) | 3,381 | $403,691 | $3.55 | 3.0% | 60% | 58% |
| Duke Energy (DUK) | 2,765 | $357,238 | $4.34 | 3.4% | 67% | 64% |
| American Electric Power (AEP) | 3,093 | $394,636 | $3.88 | 3.0% | 63% | 60% |
Source: TIKR, at today’s prices and each company’s current dividend rate.
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Con Edison costs the most, for good reason
Con Edison’s growth comes from electrification around New York, and it says requests for new building electric demand are up 20% to 25%. Its earnings have also grown faster than its dividend. Normalized EPS rose from $4.18 in fiscal 2020 to $5.70 in fiscal 2025, while the dividend went from $3.06 to $3.40 a share. That took the payout ratio from 73% to a comfortable 60%.
That gives it room to keep raising. Con Edison lifted its annualized dividend 4.4% this year, its 52nd straight year of increases. Analysts’ $6.11 of normalized EPS for fiscal 2026 puts the payout ratio at 58%.
The risk is its regulators, who have to grant rates that pay for its plans.
Duke Energy is the cheapest, with the thinnest cushion
Duke is adding 16 gigawatts of generating capacity by 2031 to serve growing demand from data centers and other big customers. Duke’s payout ratio has also come down, from 75% of normalized EPS in fiscal 2020 to 67% in fiscal 2025, as EPS rose from $5.12 to $6.31.
Analysts’ $6.74 for fiscal 2026 would bring the payout ratio down to 64%. Duke says it should finish near the top of its narrowed 2026 guidance of $6.70 to $6.80. In July, it raised its dividend 2% to $1.085 a quarter. Duke counts over 20 straight years of raises.
Duke’s weak spot is its balance sheet. Its operating earnings cover its interest just 2.41x, the lowest of the three.
AEP is putting growth first
AEP is growing fastest of the three. On Oct. 28, after signing 15 gigawatts of new load commitments in the third quarter, it unveiled a $100 billion capital plan for 2027 through 2031. It also raised its operating EPS growth target for those years to 9% to 11% a year.
The dividend will grow far more slowly. On Oct. 20, AEP raised its quarterly payment 2.1% to 97 cents. On its third-quarter call, CFO Trevor Mihalik said the company is “forecasting a similar type of modest growth to the dividend at roughly 2% over the 4- or 5-year period.”
Slow raises leave plenty of coverage. Normalized EPS rose from $4.44 in fiscal 2020 to $5.97 in fiscal 2025, while the payout ratio slipped from 64% to 63%.
Analysts’ $6.46 for fiscal 2026 would take the payout ratio to 60%. The catch is how AEP pays for its plan. It carries the most debt of the three, at 5.68x EBITDA, and it has over $5 billion of equity forwards lined up. Those new shares will spread its earnings across more stock.
So which check should a retiree want?
If I’m counting on $1,000 a month, I’d pay up for Con Edison. It has the most coverage today and in analysts’ fiscal 2026 numbers, the least debt at 4.37x EBITDA, and the biggest raise this year. Even at the 2.1% a year it averaged from fiscal 2020 to fiscal 2025, less than half this year’s pace, the same shares would pay about $14,500 a year by year 10.
Duke is the least covered and the most at risk in my view (but still “most at risk” doesn’t mean it’s truly risky, if that makes sense). Its coverage is improving and its earnings are tracking toward the top of guidance. Plus, the $46,500 you’d save is nearly four years of the full $12,000. For a retiree who wants the most income per dollar, that’s a fair trade.
AEP’s check looks safe too. But it costs more than Duke’s for raises that management expects at about the same 2% pace, and AEP leans hardest on debt and new stock.
Of course, all three depend on their regulators. Duke expects orders on its two North Carolina rate cases by mid-November, and Con Edison’s new Steam investment plan is still awaiting approval.
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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!
