ES vs XEL: Dividend Yield, Growth & Safety Comparison
Eversource Energy (ES) and Xcel Energy Inc (XEL) are both in the Utilities sector, making them natural rivals for dividend investors. ES offers a significantly higher 4.29% yield compared to XEL's 2.94%, a gap of 1.35%. For dividend growth, XEL leads with a 5-year CAGR of 11.5% versus ES's 5.7%. XEL holds the edge in dividend safety with a "Moderate" rating. ES is a Dividend Aristocrat with 26 years of consecutive increases.
Key Metrics Comparison
| Metric | ES | XEL |
|---|
| Dividend Yield | 4.29% | 2.94% |
| Annual Dividend | $2.97 | $2.28 |
| 5-Year CAGR | 5.7% | 11.5% |
| Payout Ratio | 82% | 67% |
| Consecutive Years | 26 | 1 |
| Price | $73.58 | $81.32 |
Yield Comparison
Eversource Energy (ES) currently yields 4.29%, which is attractive for the broader market. That's 1.35% more than Xcel Energy Inc (XEL), which yields 2.94%. In dollar terms, ES pays $2.97/share annually versus XEL's $2.28/share.
Dividend Growth
Over the past five years, XEL has grown its dividend at a 11.5% 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%). XEL: Dividend growth is accelerating — the 3-year CAGR of 16.6% exceeds the 5-year rate of 11.5% and the 10-year rate of 8.5%.
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. XEL's dividend safety is rated "Moderate." The payout ratio of 67% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.5x. XEL's payout ratio of 67% 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 $294/year from XEL — a difference of $135/year. At $100,000, that gap widens to $1350/year.
Verdict
- Best for income: ES
- Best for growth: XEL
- Best for safety: XEL
Frequently Asked Questions
Which has a higher dividend yield, ES or XEL?
Eversource Energy (ES) has a higher dividend yield of 4.29% compared to Xcel Energy Inc (XEL) at 2.94%.
Is ES or XEL a better dividend growth stock?
Xcel Energy Inc has the stronger dividend growth with a 5-year CAGR of 11.5%, compared to Eversource Energy's 5.7%.
Which is safer for dividend income, ES or XEL?
Eversource Energy's dividend safety is rated "At Risk" while Xcel 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 67% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.5x.
How much income does $10,000 in ES vs XEL generate?
A $10,000 investment in ES generates approximately $429/year in dividends, while the same amount in XEL generates about $294/year.
Is ES or XEL a Dividend Aristocrat?
Eversource Energy is a Dividend Aristocrat with 26 consecutive years of increases. Xcel Energy Inc does not currently qualify for aristocrat status.
Which has a lower payout ratio, ES or XEL?
Xcel Energy Inc has a lower payout ratio of 67% compared to Eversource Energy's 82%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
ES vs XEL: which is better for retirement income?
It depends on your priorities. ES for current income, XEL for dividend growth, XEL for safety. Many retirement investors hold both for diversification.
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