Key Takeaways
- Eversource Energy yields 5.0% against Southern Company’s 3.7%, and it raised its dividend 5.8% a year from fiscal 2020 to fiscal 2025, against Southern’s 3.0%.
- Both are judged on their payout ratio of normalized EPS: 63% at Eversource and 68% at Southern in fiscal 2025, and 68% and 66% on fiscal 2026 consensus, respectively.
- Analysts expect Southern’s normalized EPS to rise 7% in fiscal 2026, while Eversource’s slips to $4.65 before growing again.
- Eversource expects a FERC decision on its future transmission return by Nov. 30, and that is the next thing to watch.
Southern Company (SO) now has a 25-year, 3.2-gigawatt contract to power OpenAI in Georgia. Eversource Energy (ES) spent the summer selling its water business and appealing a federal regulator’s cut to what it can earn on its power lines.
For a dividend investor, those two stories pull in different directions. Southern’s earnings are climbing. Eversource pays the bigger check, a 5.0% yield to Southern’s 3.7%, and has raised it faster. So which one puts more money in your pocket over the next 10 years?
| Metric | Southern Company (SO) | Eversource Energy (ES) |
|---|---|---|
| Dividend yield | 3.7% | 5.0% |
| Annual dividend, current rate | $3.04 | $3.15 |
| Dividend growth, fiscal 2020–2025 | 3.0% a year | 5.8% a year |
| Payout ratio of normalized EPS, fiscal 2025 | 68% | 63% |
| Payout ratio of normalized EPS, fiscal 2026 consensus | 66% | 68% |
| Net debt/EBITDA, last 12 months | 5.06x | 5.64x |
| Forward P/E (NTM) | 18.3x | 14.0x |
Southern’s earnings are outrunning its dividend
Data centers are doing the heavy lifting at Southern. Data center usage on its system rose 55% in the second quarter of 2026 from a year earlier.
That growth shows up in the coverage. Normalized EPS rose from $3.11 in fiscal 2019 to $4.30 in fiscal 2025. Over the same years, the payout ratio of normalized EPS came down from 79.1% to 68%.
On fiscal 2026 consensus, the ratio eases to a comfortable 66%.
The raises themselves stay modest. In April, Southern lifted its annualized dividend from $2.96 to $3.04 a share, and said on its April 30 call: “This action marks our 25th consecutive annual increase, and this will now be 79 consecutive years, dating back to 1948, Southern Company has paid a dividend that is equal to or greater than the previous year.”
The risk is dilution. Southern still expects to need $1.1 billion of new equity by 2030.
Eversource’s dividend moves with its earnings
Eversource’s record has a different shape from Southern’s: faster raises, paid from a steady share of earnings. From fiscal 2016 to fiscal 2025, the dividend rose from $1.78 to $3.01 a share and normalized EPS from $2.96 to $4.76. Through all ten years, the payout ratio of normalized EPS stayed between 60.1% and 63.2%.
Fiscal 2026 is a speed bump. Analysts expect normalized EPS to slip from $4.76 in fiscal 2025 to $4.65. Meanwhile the dividend rises from $3.01 to $3.15, so the ratio climbs to 68%, higher than any year on the chart.
Part of the pressure comes from regulation. Transmission earnings fell to $183.7 million in the second quarter of 2026 from $208.0 million a year earlier. Eversource puts that down to a FERC-ordered cut in its allowed base ROE from 10.57% to 9.57% and higher interest expense, and it’s appealing the decision.
The Aquarion sale brought in $1.7 billion of net proceeds to pay down parent debt, and Eversource expects to issue no new stock this year. Still, its net debt runs at 5.64x EBITDA, above Southern’s 5.06x.
So which dividend wins?
Eversource pays you more over the next 10 years. At its 5.0% yield and 5.8% pace of raises, $10,000 pays about $6,530 over the decade. Southern, at 3.7% and 3.0%, pays about $4,235.
The test is whether Eversource can keep that pace through a weaker 2026. Management reaffirmed 5% to 7% annual EPS growth through 2030 from a $4.65 base. Analysts see earnings growing again after this year.
Consensus has normalized EPS at $4.92 in fiscal 2027 and $5.24 in fiscal 2028. Eversource’s dividend has tracked its earnings for a decade, so that’s the growth its raises need.
And even if Eversource froze its dividend, $500 a year for 10 years is $5,000. That’s still more than Southern’s $4,235. For me, that settles it.
Southern’s case is a good one. Its earnings are growing on data center demand, and its payout ratio is lower on fiscal 2026 estimates. It also carries less debt and has paid an equal or bigger dividend every year since 1948. It’s just that its raises are small, and starting from a 3.7% yield, they never catch Eversource’s bigger check at these rates.
Of course, Eversource expects FERC’s decision on its transmission return by Nov. 30. A low one would squeeze the earnings those raises come from.
So what is Eversource Energy 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!
