ES vs SO: Dividend Yield, Growth & Safety Comparison
Eversource Energy (ES) and Southern Co (SO) are both in the Utilities sector, making them natural rivals for dividend investors. ES offers a significantly higher 4.29% yield compared to SO's 3.22%, a gap of 1.07%. For dividend growth, ES leads with a 5-year CAGR of 5.7% versus SO's 2.9%. SO holds the edge in dividend safety with a "Moderate" rating. Both are classified as Dividend Aristocrats.
Key Metrics Comparison
| Metric | ES | SO |
|---|
| Dividend Yield | 4.29% | 3.22% |
| Annual Dividend | $2.97 | $2.92 |
| 5-Year CAGR | 5.7% | 2.9% |
| Payout Ratio | 82% | 73% |
| Consecutive Years | 26 | 25 |
| Price | $73.58 | $94.53 |
Yield Comparison
Eversource Energy (ES) currently yields 4.29%, which is attractive for the broader market. That's 1.07% more than Southern Co (SO), which yields 3.22%. In dollar terms, ES pays $2.97/share annually versus SO's $2.92/share.
Dividend Growth
Over the past five years, ES has grown its dividend at a 5.7% CAGR compared to SO's 2.9%. 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%). SO: Dividend growth has been steady, with a 3-year CAGR of 2.8% and a 5-year CAGR of 2.9% (10-year: 6.4%).
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. SO's dividend safety is rated "Moderate." The payout ratio of 73% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.4x. SO's payout ratio of 73% 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 $322/year from SO — a difference of $107/year. At $100,000, that gap widens to $1070/year.
Verdict
- Best for income: ES
- Best for growth: ES
- Best for safety: SO
Frequently Asked Questions
Which has a higher dividend yield, ES or SO?
Eversource Energy (ES) has a higher dividend yield of 4.29% compared to Southern Co (SO) at 3.22%.
Is ES or SO a better dividend growth stock?
Eversource Energy has the stronger dividend growth with a 5-year CAGR of 5.7%, compared to Southern Co's 2.9%.
Which is safer for dividend income, ES or SO?
Eversource Energy's dividend safety is rated "At Risk" while Southern Co 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 73% 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 SO generate?
A $10,000 investment in ES generates approximately $429/year in dividends, while the same amount in SO generates about $322/year.
Is ES or SO a Dividend Aristocrat?
Eversource Energy is a Dividend Aristocrat (26 years) and Southern Co is a Dividend Aristocrat (25 years).
Which has a lower payout ratio, ES or SO?
Southern Co has a lower payout ratio of 73% compared to Eversource Energy's 82%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
ES vs SO: which is better for retirement income?
It depends on your priorities. ES for current income, ES for dividend growth, SO for safety. Many retirement investors hold both for diversification.
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