EXC Stock: Is Exelon a Buy? | Utility Income Play

Exelon is America's largest regulated utility by customer count, serving 10.7 million customers across the PJM corridor from Chicago to D.C. — a pure-play transmission and distribution tollbooth after spinning off its nuclear generation fleet into Constellation Energy.

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

The Business

Exelon operates the nation's largest nuclear fleet and serves 10 million customers across Pennsylvania, Illinois, Maryland, New Jersey, Delaware, and Washington D.C. through six regulated utility subsidiaries. This is a pure-play regulated utility that ditched its competitive generation business in 2022 to focus on what utilities do best: collecting regulated returns on essential infrastructure investments.

The company's crown jewel is its nuclear portfolio — roughly 21,000 MW of carbon-free baseload generation that runs 24/7 regardless of weather. These plants are geological money machines: once built, the marginal cost of a kilowatt-hour is essentially fuel and maintenance. In PJM's capacity markets, these assets command premium prices as grid operators pay for reliability. Meanwhile, the regulated utility subsidiaries earn state-approved returns on $90+ billion in rate base across transmission lines, distribution networks, and smart grid investments.

Exelon's tollbooth operates through regulated monopoly franchises. When Philadelphia needs power, it flows through PECO's wires. When Chicago's grid needs upgrading, ComEd earns its authorized return on invested capital. The nuclear fleet provides the physical backbone for grid stability across the Mid-Atlantic — a region experiencing explosive data center growth.

By the Numbers

The Tollbooth Thesis

Exelon sits at the intersection of America's two biggest infrastructure megatrends: grid modernization and nuclear renaissance. The company's service territories are experiencing unprecedented electricity demand growth, driven by data centers, electrification, and manufacturing reshoring. PJM forecasts 40+ GW of new demand by 2030 — equivalent to 40 nuclear reactors worth of consumption.

The nuclear angle is particularly compelling. While politicians debate energy policy, grid operators care about one thing: keeping the lights on when wind doesn't blow and solar doesn't shine. Exelon's nuclear fleet provides 24/7 carbon-free baseload that can't be replicated with batteries or natural gas in a carbon-constrained world. These plants are increasingly viewed as critical infrastructure, commanding premium pricing in capacity auctions and benefiting from federal production tax credits worth $15/MWh.

On the regulated utility side, Exelon's subsidiaries are deploying billions in grid hardening, smart meters, and transmission upgrades. ComEd alone plans $7 billion in investments through 2028, earning Illinois' authorized 9.5% return on equity. When you're guaranteed a regulated return on essential infrastructure, the math works regardless of economic cycles.

The Risks

• Regulatory pressure — State commissions could reduce authorized returns or slow cost recovery

• Nuclear economics — Aging fleet faces rising maintenance costs and potential early retirements

• Interest rate sensitivity — High debt levels make borrowing costs a material earnings drag

• Technology disruption — Distributed solar and storage could reduce demand for centralized power

• Political risk — Nuclear remains controversial despite environmental benefits

Income Angle

Exelon's 3.6% dividend yield looks conservative compared to utility peers, but that's by design. The 57% payout ratio provides substantial coverage and room for growth as the company deploys capital into rate base expansion. Management targets 6-8% annual dividend growth through 2027, supported by $25+ billion in planned infrastructure investments.

The dividend history reflects the company's 2022 transformation. After spinning off unregulated generation, Exelon reset its dividend to a sustainable level backed by predictable regulated cash flows. This isn't a high-yield trap — it's a growing income stream backed by monopoly assets earning guaranteed returns. For investors seeking real asset exposure with inflation protection, regulated utilities provide natural rate base escalators tied to replacement costs.

The Bottom Line

Exelon is a bet on America's nuclear backbone and grid modernization imperative. The stock trades at a reasonable multiple for a regulated utility with above-average growth prospects, while the dividend provides growing income backed by essential infrastructure. Buy for exposure to the nuclear renaissance and PJM's capacity crunch.

Related Research

• Illinois Power Grid Risk Assessment
• XLE: Energy Select Sector SPDR
• Constellation Energy (CEG) Tollbooth Analysis
• XOP: SPDR S&P Oil & Gas Exploration
• VDE: Vanguard Energy ETF

Frequently Asked Questions

Is Exelon (EXC) a good utility investment?

Exelon is a pure regulated utility after the Constellation spinoff, offering predictable 5-7% earnings growth and a 3-3.5% dividend yield. With no commodity exposure and 100% regulated earnings from T&D operations in dense urban markets, it's one of the lowest-risk utility investments available. The premium valuation reflects this quality.

What did Exelon do with its nuclear plants?

In 2022, Exelon spun off its entire competitive generation fleet — including the nation's largest nuclear fleet — into Constellation Energy (CEG). This left Exelon as a pure-play regulated T&D utility focused on infrastructure investment, removing commodity price risk from the earnings profile.

How does Exelon benefit from data center growth?

Exelon's utilities serve key PJM data center markets including northern Virginia (Pepco), Chicago (ComEd), and the Baltimore-D.C. corridor (BGE). Data center interconnection requests drive transmission and distribution investment that earns regulated returns. The PJM region accounts for over 40% of U.S. data center capacity.

What is Exelon's dividend yield?

Exelon yields approximately 3-3.5% with targeted annual dividend growth of 5-7%, matching its regulated earnings growth rate. The payout ratio of ~60% provides comfortable coverage while allowing reinvestment in grid infrastructure.

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