Eversource surges 4.3% on $26.5B investment plan, dividend hike
Utility projects 5-7% annual EPS growth through 2030 after Q4 earnings beat
Eversource Energy shares jumped 4.3% on Thursday after the New England utility unveiled an ambitious $26.5 billion capital investment plan targeting 5-7% annual earnings growth through 2030, while delivering better-than-expected fourth-quarter results and increasing its dividend.
The Hartford and Boston-based company reported fourth-quarter earnings of $421.3 million, or $1.12 per share, surpassing analyst estimates of $1.10 and marking a significant improvement from $72.5 million, or $0.20 per share, in the same period last year, according to regulatory filings. Full-year GAAP earnings surged to $1.69 billion, or $4.56 per share, up from $811.7 million, or $2.27 per share, in 2024.
The five-year investment plan, which increases the company's previous capital allocation by $2.3 billion, focuses primarily on electric and natural gas distribution infrastructure upgrades across Connecticut, Massachusetts and New Hampshire. Management projects the expanded investment program will drive annual earnings per share growth of 5-7% through 2030, using 2025 non-GAAP recurring earnings of $4.76 per share as the base year.
"We successfully executed our priorities in 2025, delivering strong operational and financial results, strengthening our balance sheet, and improving cash flow," said Joe Nolan, Eversource's Chairman, President and CEO. "We made significant progress in achieving constructive regulatory outcomes through collaboration with regulators."
The board of trustees approved a quarterly dividend of $0.7875 per share, payable March 31 to shareholders of record as of March 5, representing an annualized yield of approximately 4.3% at current levels. The dividend increase signals management confidence in the company's growth trajectory despite recent challenges in its renewable energy investments.
For 2026, Eversource provided earnings guidance of $4.80 to $4.95 per share, implying growth of roughly 1-4% from 2025 non-GAAP results. The company anticipates annual earnings growth will accelerate toward the upper half of its 5-7% long-term guidance range by 2028.
The investment expansion comes as Eversource transitions to what Nolan described as a "pure-play regulated utility" following strategic exits from offshore wind projects. The full-year 2025 results included a $75 million after-tax charge related to liabilities from the sale of South Fork Wind and Revolution Wind projects, though this was substantially less severe than the $524 million loss recorded in 2024 from offshore wind divestitures.
To fund the expanded capital program, Eversource plans to issue $800 million to $1.1 billion in equity between 2026 and 2030, excluding annual issuances from dividend reinvestment and equity compensation programs. The company's balance sheet remains solid, with a forward price-to-earnings ratio of 13.4 and a relatively low beta of 0.79, indicating lower volatility compared to the broader market.
Wall Street's reaction has been measured but generally positive following the earnings announcement. While consensus analyst ratings remain largely at "Hold," the average 12-month price target stands at approximately $71.50, according to MarketBeat data, suggesting modest upside from current levels around $73.36.
Some analysts have expressed cautious optimism about the investment plan's growth potential while noting regulatory risks, particularly in Connecticut regarding the recovery of storm-related costs. However, Eversource's focus on core regulated utility operations rather than merchant energy projects has been viewed positively by many investors seeking stable, predictable returns.
The company's transformation strategy appears to be resonating with shareholders, who have pushed the stock up more than 45% from its 52-week low of $50.49. Thursday's surge brought the shares closer to their yearly high of $74.42, reached earlier in February.
Eversource serves approximately 4 million customers across New England and remains focused on infrastructure modernization, grid resilience and energy efficiency initiatives as part of its long-term growth strategy. The utility sector has attracted increased investor attention in recent months as companies balance infrastructure investment needs with rate stability concerns in an inflationary environment.