Eversource Energy (ES): This Utility Could Be Ready for Its Next Leg Higher
Utilities haven’t been one of the market’s most exciting sectors in recent years, but we believe Eversource Energy (ES) is becoming an increasingly compelling opportunity. The company has completed a major turnaround, demand for electricity is accelerating, and a significant investment cycle could support years of earnings growth.
Eversource is the largest regulated electric and natural gas utility in New England, serving approximately 4.6 million customers across Connecticut, Massachusetts and New Hampshire. The company owns the transmission and distribution infrastructure that delivers electricity and natural gas throughout the region, making it a direct beneficiary of rising power demand.
That demand story is becoming increasingly attractive. Electricity consumption in New England is projected to increase 15% by 2035 and 50% by 2045 as electric vehicles, heat pumps and data centers require more power. Since regulated utilities earn a return on the infrastructure they build, higher investment can translate into long-term earnings growth.
To capitalize on that opportunity, Eversource plans to invest $26.5 billion between 2026 and 2030. The spending includes $11.2 billion for electric distribution, $7.2 billion for transmission and $6.8 billion for natural gas infrastructure. Massachusetts has already approved the company’s Electric Sector Modernization Plan, which targets a 180% increase in electrification investment, enough to support 2.5 million electric vehicles and one million residential heat pumps statewide.
The company has also cleaned up several issues that weighed on results in recent years. An offshore wind venture contributed to a $1.26 per share net loss in fiscal 2023, but management has since exited that business. Earnings recovered to $2.27 per share in 2024 and then to $4.56 per share in 2025. On June 30, Eversource also completed the sale of its Aquarion water utility, leaving the company as a pure-play regulated electric and gas utility.
There have been some headwinds. Earlier this year, regulators reduced the allowed return on equity for New England transmission owners from 10.57% to 9.57%, prompting Eversource to lower its 2026 non-GAAP earnings guidance to $4.57 to $4.72 per share from its previous range of $4.80 to $4.95. Even so, the company demonstrated resilience by reporting first-quarter non-GAAP earnings of $1.73 per share, ahead of the $1.59 consensus estimate despite absorbing a $43.9 million after-tax charge related to the regulatory change.
Management expects earnings per share to grow between 5% and 7% annually through 2030 and is targeting the upper end of that range by 2028.
The stock trades around $75 per share and offers investors a dividend yield of approximately 4.2%. The annual dividend was recently increased 5% to $3.15 per share. At roughly 16 times forward earnings, the shares also trade at a discount to many premium regulated utilities despite improving fundamentals.
Another catalyst is right around the corner. Eversource reports second-quarter earnings after the market closes today, with a conference call scheduled for tomorrow morning. Wall Street expects approximately $3 billion in revenue, up 5% year over year, and earnings of $0.90 per share. Investors will be watching closely for any updates to full-year guidance and management’s outlook for future earnings growth.
After several years of restructuring, Eversource appears to have emerged as a stronger, more focused utility. With growing electricity demand, billions of dollars in planned infrastructure investment, an attractive dividend and improving earnings, we believe the company is well positioned for long-term investors seeking a combination of income and steady growth.
