ES Stock: Is Eversource a Buy? | New England Utility Play

Eversource Energy owns the transmission grid across New England — a region facing acute gas supply constraints and aggressive offshore wind mandates — making it a tollbooth on the most infrastructure-constrained power market in the continental United States.

Last updated: 2026-02-02 · Data: Yahoo Finance, SEC filings, company investor presentations

The Business

Eversource Energy operates one of New England's most essential pieces of infrastructure: the electric grid serving 4.4 million customers across Massachusetts, Connecticut, and New Hampshire. The company owns 9,300 miles of transmission lines, 72,000 miles of distribution lines, and 366 substations — the physical backbone that keeps the lights on from Boston to the White Mountains.

This is a textbook tollbooth business. Every electron flowing through New England pays Eversource a fee, whether it comes from a solar farm in Vermont or a gas plant in Connecticut. The company's regulated utility model guarantees returns on invested capital while rate structures ensure cost recovery plus profit margins. Unlike merchant generators that bet on volatile power prices, Eversource collects predictable fees regardless of energy market conditions.

The regulatory compact is simple: Eversource builds and maintains the grid infrastructure, state regulators approve reasonable returns (typically 9-10% on equity), and customers pay through their monthly bills. It's a monopoly by design — you can't exactly build competing power lines down the same street.

By the Numbers

The Tollbooth Thesis

Eversource sits at the center of two massive capital deployment cycles that will drive rate base growth for the next decade. First, the company is spending $17 billion through 2028 on grid modernization and reliability projects — new transmission lines, substation upgrades, and smart grid technology. Every dollar invested grows the rate base, which directly translates to higher earnings through regulated returns.

Second, New England's offshore wind buildout requires substantial transmission infrastructure to connect ocean-based wind farms to population centers. Eversource's transmission subsidiary is developing multiple projects to link offshore wind resources to the grid, including the South Fork Wind connector and Sunrise Wind transmission. These aren't speculative investments — they're rate-regulated assets with guaranteed returns backed by state renewable mandates.

The regulatory environment strongly favors infrastructure investment. Massachusetts, Connecticut, and New Hampshire have all enacted climate laws requiring 50-80% emissions reductions by 2030-2050. Meeting these targets requires massive grid upgrades to handle intermittent renewable resources and electric vehicle charging. Eversource gets paid to build the infrastructure that enables the energy transition.

The Risks

• Regulatory lag risk — rate increases require lengthy approval processes that can delay cost recovery

• High leverage — 184% debt-to-equity ratio leaves little margin for error if interest rates spike further

• Opposition to rate increases — consumer groups and politicians routinely challenge utility rate hike requests

• Execution risk on major projects — transmission and offshore wind infrastructure can face permitting delays and cost overruns

• Energy efficiency headwinds — improving building efficiency and distributed solar can reduce electricity demand growth

Income Angle

Eversource has increased its dividend for 26 consecutive years, a track record that reflects the stability of regulated utility cash flows. The current 4.6% yield sits well above the 10-year Treasury and provides inflation protection through regular rate adjustments. The 82% payout ratio leaves room for modest dividend growth while funding capital investment.

The dividend growth rate has averaged 6% annually over the past decade, driven by expanding rate base from infrastructure investment. For income-focused investors, Eversource offers the rare combination of current yield, growth potential, and real-asset backing. The company's infrastructure appreciates in value while generating predictable cash flows — exactly what retirees and pension funds need as traditional bonds offer sub-inflation returns.

The Bottom Line

Eversource is a pure play on the grid rebuild that must happen regardless of political winds or economic cycles. The company's New England monopoly position, combined with aggressive state renewable mandates, creates a multi-decade capital deployment opportunity with regulated returns. At current prices, investors get a 4.6% dividend yield backed by essential infrastructure and protected by regulatory moats.

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Frequently Asked Questions

Is Eversource Energy (ES) a good investment?

Eversource offers regulated utility exposure to New England's infrastructure constraints, but the stock has been pressured by offshore wind project losses and write-downs. For value investors, the depressed valuation creates an entry point into a high-quality transmission franchise. The 4%+ yield provides income while waiting for the wind-related overhang to clear.

What happened with Eversource's offshore wind projects?

Eversource took significant write-downs on its offshore wind joint ventures as construction costs surged and power purchase agreements became uneconomic. The company has since exited its offshore wind equity positions, removing the major source of earnings volatility and refocusing on its core regulated T&D business.

Why is New England's grid valuable for Eversource?

New England has some of the highest electricity prices in the continental U.S. due to natural gas pipeline constraints and limited generation diversity. This drives significant transmission investment to improve reliability and interconnect new generation sources, all earning regulated returns for Eversource shareholders.

What is Eversource's dividend yield?

Eversource yields approximately 4-4.5%, above the utility sector average due to the stock price depression from wind-related losses. The company has increased its dividend for 25+ consecutive years and targets 5-7% annual growth going forward, now supported by the pure regulated business model.

This analysis is part of Energy Macro's Tollbooth Royalties research. For our complete infrastructure income framework, see The Blackout Fortune Playbook.

Last updated: February 1, 2026 | Data: Yahoo Finance, SEC filings, company investor presentations