NYSE:ES
EVERSOURCE ENERGY
A hybrid utility holding company providing essential electric and gas services to over 2 million customers while expanding its competitive solar portfolio.
Key Metrics
Investment Thesis
Bull Case
The stock offers an attractive yield profile combined with capital appreciation potential from its growing competitive solar segment which is less constrained by regulation. Strong free cash flow generation supports consistent dividend growth and provides a safety margin for weather-related infrastructure investments. The dual exposure to regulated utilities providing defensive characteristics and competitive renewables offering upside captures a unique value proposition in the energy transition.
Bear Case
Heavy capital expenditure requirements of $4.16B annually may pressure free cash flow if regulatory approvals for rate increases lag behind project completion timelines. Regulatory uncertainty in New England markets could erode profit margins as state policymakers push for accelerated decarbonization without guaranteed cost recovery. The company faces increasing competition from virtual power providers and rooftop solar installations which threaten the long-term growth trajectory of its traditional distribution business.
About EVERSOURCE ENERGY
Eversource Energy is a diversified utility holding company serving residential, commercial, and industrial customers across New England and the Southeast. The company generates revenue primarily through regulated electricity and natural gas distribution, along with competitive solar generation assets. With strong recent profitability and significant capital investments in grid modernization, Eversource balances stable utility cash flows with growth opportunities in renewable energy.
Analysis
Management Discussion
Eversource delivered robust financial performance in the latest fiscal year with net profit reaching $1.70B driven by strong operational efficiency and successful rate recovery mechanisms. Operating cash flow of $4.11B demonstrates the resilience of its regulated utility core, though heavy capital expenditures of $4.16B reflect ongoing investments in grid modernization and renewable expansion. The company maintained a healthy liquidity position with ending cash of $246.2M while managing debt levels effectively through strategic issuances and repayments.
Industry Overview
The utility sector is undergoing a fundamental transformation driven by climate policies and technological innovation requiring massive capital investment in renewable generation and smart grid infrastructure. Regulated utilities face balancing acts between meeting decarbonization mandates while maintaining reliable service for customers in increasingly volatile energy markets. Competitive segments are creating new revenue streams but also introducing volatility that traditional utility investors have not historically experienced.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $12.29B | $11.91B | $11.90B | $13.55B |
| Cost of Revenue | $0 | $0 | $0 | $0 |
| Gross Profit | $12.29B | $11.91B | $11.90B | $13.55B |
| Operating Expenses | $10.09B | $9.51B | $9.49B | $10.56B |
| Operating Income | $2.20B | $2.40B | $2.41B | $2.99B |
| Stock-Based Comp | $33.4M | $27.8M | $30.0M | $33.6M |
| D&A | $1.64B | $815.7M | $1.78B | $2.40B |
| Depreciation | $1.19B | $1.31B | $1.43B | $1.57B |
| Non-Operating Income | $-332.2M | $-2.67B | $-1.16B | $-1.15B |
| Interest Expense | $678.3M | $855.4M | — | — |
| Interest Income | $50.5M | $94.2M | $138.2M | $125.5M |
| Pre-Tax Income | $1.87B | $-275.0M | $1.24B | $1.84B |
| Income Tax | $453.6M | $159.7M | $424.7M | $140.3M |
| Continuing Ops | $1.41B | $-434.7M | $819.2M | $1.70B |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $1.41B | $-434.7M | $819.2M | $1.70B |
| Minority Interest | $7.5M | $7.5M | $7.5M | $7.5M |
| Net to Common | $1.40B | $-442.2M | $811.7M | $1.69B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $4.22B | $4.25B | $5.08B | $5.08B |
| Cash & Equivalents | $374.6M | $53.9M | $26.7M | $135.4M |
| Accounts Receivable | $1.52B | $1.43B | $1.65B | $1.85B |
| Other Current Assets | $2.33B | $2.76B | $3.40B | $3.09B |
| Long-Term Assets | $49.01B | $51.36B | $54.52B | $58.71B |
| Goodwill | $4.52B | $4.53B | $3.57B | $4.23B |
| Operating Leases | $56.9M | $53.5M | $56.1M | $47.4M |
| LT Securities | $366.5M | $337.8M | $320.3M | $317.1M |
| Other LT Assets | $41.89B | $45.78B | $50.40B | $53.95B |
| Total Assets | $53.23B | $55.61B | $59.59B | $63.79B |
| Current Liabilities | $6.80B | $6.34B | $6.72B | $7.81B |
| Accounts Payable | $2.11B | $1.87B | $1.74B | $1.86B |
| Current Debt | $1.32B | $824.8M | $1.00B | $1.39B |
| Current Leases | $9.0M | $9.5M | $10.4M | $10.0M |
| Other Current Liab | $3.36B | $3.64B | $3.97B | $4.55B |
| Long-Term Liabilities | $30.96B | $35.10B | $37.83B | $39.78B |
| Long-Term Debt | $19.72B | $23.59B | $25.70B | $26.87B |
| LT Operating Leases | $47.9M | $44.0M | $45.7M | $37.4M |
| Other LT Liab | $11.19B | $11.46B | $12.09B | $12.87B |
| Total Liabilities | $37.76B | $41.44B | $44.56B | $47.59B |
| Shareholders' Equity | $15.47B | $14.17B | $15.04B | $16.20B |
| Paid-In Capital | $8.40B | $8.46B | $9.43B | $9.94B |
| Retained Earnings | $5.53B | $4.14B | $3.93B | $4.50B |
| AOCI | $-39.4M | $-33.7M | $-26.5M | $-20.5M |
| Treasury Stock | $216.2M | $195.7M | $170.8M | $139.4M |
| Total L&E | $53.23B | $55.61B | $59.59B | $63.79B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $1.41B | $-434.7M | $819.2M | $1.70B |
| Non-Cash Adjustments | $-13.4M | $2.06B | $16.5M | $2.20B |
| Working Capital Changes | $1.00B | $18.1M | $1.32B | $210.3M |
| Cash from Operations | $2.40B | $1.65B | $2.16B | $4.11B |
| Capital Expenditures | $3.44B | $4.34B | $4.48B | $4.16B |
| Cash from Investing | $-4.13B | $-4.87B | $-4.54B | $-4.31B |
| Debt Issuances | $4.04B | $5.20B | $4.50B | $2.94B |
| Debt Repayments | $1.18B | $2.01B | $1.95B | $1.40B |
| Dividends Paid | $860.0M | $919.0M | $1.00B | $1.09B |
| Cash from Financing | $2.03B | $2.87B | $2.34B | $311.5M |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $300.7M | $-355.3M | $-39.1M | $118.9M |
| Beginning Cash | $221.0M | $521.8M | $166.4M | $127.3M |
| Ending Cash | $521.8M | $166.4M | $127.3M | $246.2M |
Frequently Asked Questions
How does EVERSOURCE ENERGY make money?
Regulated Electric Distribution generating steady revenue from selling electricity to customers in Massachusetts, New Hampshire, and Maine. Regulated Gas Distribution serving residential and commercial heating needs across Connecticut, Rhode Island, and New York. Competitive Solar Generation involving owned and leased solar assets that provide exposure to volatile wholesale energy markets without the traditional utility ratemaking constraints.
What are the main risks for ES?
Regulatory risk from potential rate caps or delays in cost recovery mechanisms impacting earnings visibility. Exposure to extreme weather events and climate change increasing infrastructure maintenance costs and insurance premiums. Rising fuel costs for natural gas distribution potentially squeezing margins if not passed through to consumers. Political pressure on utility decarbonization targets could accelerate capital expenditure requirements beyond current projections.
What is ES's competitive advantage?
Deeply entrenched regulated franchise territories in high-cost Northeast markets providing predictable, long-term revenue streams insulated from direct competition. Diversified portfolio combining stable utility dividends with higher-margin growth assets like solar generation and battery storage projects. Strong balance sheet supported by consistent operating cash flows enabling continued investment in grid resilience and clean energy transitions.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.