Morningstar | Eversource's distribution utilities are becoming key growth drivers.
Eversource Energy's mix of electric, gas, and water utility businesses in the Northeast allows it to play a key role in the region's energy transformation. Its April 2012 merger with NStar and 2017 acquisition of Aquarion make it the largest utility in the Northeast with sizable operations throughout the energy value chain. As the region moves toward a mix of natural gas and renewable energy, we think Eversource is well positioned to continue growing 6% through 2022.In recent years, electric transmission had been Eversource's primary earnings growth driver. The company invested $3.5 billion in transmission in 2015-18, taking transmission earnings to 40% of consolidated earnings. That share was set to grow until the $1.6 billion Northern Pass project ran into regulatory challenges in early 2018. Eversource now plans $1.75 billion of transmission investments in 2019-21, which is likely enough to maintain its share of transmission earnings even with a ramp-up in earnings from its other businesses.Eversource has turned to distribution and renewable energy investments to maintain its 6% consolidated earnings and dividend growth outlook through 2021. New distribution rates in Connecticut and Massachusetts in 2018 should improve returns and support earnings growth.Connecticut regulation has historically been challenging, but we think Eversource achieved a constructive outcome in its most recent rate case. We think Massachusetts is also an increasingly attractive area for investment. Eversource enjoys rate-decoupling, forward-looking rates, and support for grid modernization investment through 2023, all of which support cash flow growth.We think investors should feel comfortable that Eversource can maintain 6% annual earnings and dividend growth without needing a single large project. Its natural gas and water distribution utilities offer strong customer and infrastructure growth potential. Eversource also is making a big move in renewable energy with its offshore wind project. Gas pipelines are another area of potential investment that could emerge in the next few years.Eversource Energy is a public utility holding company. Through its subsidiaries, the company has four segments: electric distribution, which is engaged in the distribution of electricity to retail customers in Connecticut, Massachusetts and New Hampshire; electric transmission, which owns and maintains transmission facilities that are part of an interstate power transmission grid over which electricity is transmitted throughout New England; natural gas distribution, which distributes natural gas to communities in Massachusetts and cities and towns in Connecticut; and water distribution, which provides water services in towns and cities in Connecticut, Massachusetts and New Hampshire.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.