ES vs NEE: Dividend Yield, Growth & Safety Comparison
Eversource Energy (ES) and Nextera Energy Inc (NEE) are both in the Utilities sector, making them natural rivals for dividend investors. ES offers a significantly higher 4.29% yield compared to NEE's 2.49%, a gap of 1.80%. For dividend growth, NEE leads with a 5-year CAGR of 10.2% versus ES's 5.7%. NEE holds the edge in dividend safety with a "Moderate" rating. Both are classified as Dividend Aristocrats.
Key Metrics Comparison
| Metric | ES | NEE |
|---|
| Dividend Yield | 4.29% | 2.49% |
| Annual Dividend | $2.97 | $2.27 |
| 5-Year CAGR | 5.7% | 10.2% |
| Payout Ratio | 82% | 69% |
| Consecutive Years | 26 | 30 |
| Price | $73.58 | $93.81 |
Yield Comparison
Eversource Energy (ES) currently yields 4.29%, which is attractive for the broader market. That's 1.80% more than Nextera Energy Inc (NEE), which yields 2.49%. In dollar terms, ES pays $2.97/share annually versus NEE's $2.27/share.
Dividend Growth
Over the past five years, NEE has grown its dividend at a 10.2% CAGR compared to ES's 5.7%. ES: Dividend growth has been steady, with a 3-year CAGR of 5.6% and a 5-year CAGR of 5.7% (10-year: 6.0%). NEE: Dividend growth has been steady, with a 3-year CAGR of 10.1% and a 5-year CAGR of 10.2% (10-year: 11.2%).
Dividend Safety
ES's dividend safety is rated "At Risk." The payout ratio of 82% is elevated, which may indicate the dividend could be cut if earnings decline. Earnings cover the dividend 1.2x. NEE's dividend safety is rated "Moderate." The payout ratio of 69% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.4x. NEE's payout ratio of 69% is more conservative than ES's 82%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in ES generates approximately $429/year in dividend income, compared to $249/year from NEE — a difference of $180/year. At $100,000, that gap widens to $1800/year.
Verdict
- Best for income: ES
- Best for growth: NEE
- Best for safety: NEE
Frequently Asked Questions
Which has a higher dividend yield, ES or NEE?
Eversource Energy (ES) has a higher dividend yield of 4.29% compared to Nextera Energy Inc (NEE) at 2.49%.
Is ES or NEE a better dividend growth stock?
Nextera Energy Inc has the stronger dividend growth with a 5-year CAGR of 10.2%, compared to Eversource Energy's 5.7%.
Which is safer for dividend income, ES or NEE?
Eversource Energy's dividend safety is rated "At Risk" while Nextera Energy Inc is rated "Moderate." The payout ratio of 82% is elevated, which may indicate the dividend could be cut if earnings decline. Earnings cover the dividend 1.2x. The payout ratio of 69% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.4x.
How much income does $10,000 in ES vs NEE generate?
A $10,000 investment in ES generates approximately $429/year in dividends, while the same amount in NEE generates about $249/year.
Is ES or NEE a Dividend Aristocrat?
Eversource Energy is a Dividend Aristocrat (26 years) and Nextera Energy Inc is a Dividend Aristocrat (30 years).
Which has a lower payout ratio, ES or NEE?
Nextera Energy Inc has a lower payout ratio of 69% compared to Eversource Energy's 82%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
ES vs NEE: which is better for retirement income?
It depends on your priorities. ES for current income, NEE for dividend growth, NEE for safety. Many retirement investors hold both for diversification.
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