Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Dividend Aristocrats Part 24 of 52: Consolidated Edison, Inc. (ED)

Aesop was born into slavery in Greece around 620 BC. His tremendous intelligence did more than earn him his freedom. He rose to become a respected advisor to kings and city-states.

One of Aesop’s most famous fables is the tortoise and the hare. An arrogant, speedy hare brags to a plodding turtle about how fast he is.  The plodding turtle challenges Aesop to a race. The hare took a commanding lead and looks back, feeling confident that he will win the race. The hare decides to take a ‘power nap’. The slow and steady turtle passes the hare and wins the race.

Consolidated Edison Tortoise and Hare

The moral of Aesop’s fable:  slow and steady wins the race.

Aesop’s story of the tortoise and the hare reminds me of Consolidated Edison, Inc. (NYSE:ED).

Consolidated Edison’s History

Consolidated Edison can trace its history back to 1823 – nearly 200 years ago.  Back then, the company was known as New York Gas Light Company.

In 1884, representatives of several gas light utilities throughout New York came together and consolidated their respective companies into a new business – the Consolidated Gas Company of New York.  The company continued to grow and acquire gas, electric, and steam companies serving New York City and Westchester County.  In 1936, the company changed its name to Consolidated Edison.

Consolidated Edison has paid increasing dividends for 41 consecutive years.  The company is the only utility in the S&P 500 with 30+ years of increasing dividends.  Consolidated Edison’s dividend growth over the last 41 years is shown below:

Consolidated Edison Dividend History

Source:  Data from Yahoo! Finance

Among the investors that Insider Monkey follows, Consolidated Edison is not very popular with only 15 investors holding around 1.40% of the company’s outstanding stock at the end of June. During the second quarter, the number of funds bullish on the company declined by seven. In the current round of 13F filings, Michael Messner’s Seminole Management reported ownership of 826,782 shares of Consolidated Edison held as of the end of September.

Consolidated Edison Business Overview

Consolidated Edison is primarily a regulated utilities business.  The company has generated 89% of its revenue from its regulated utilities business segments through the first 9 months of fiscal 2015.

Consolidated Edison Regulated Utilities
Source:  2015 EEI Conference Presentation, slide 25

The company operates in 3 segments:


– O&R

– Competitive Energy Business

CECONY stands for Consolidated Edison Company Of New York.  O&R stands for Orange & Rockland.  Together, these two segments make up Consolidated Edison’s regulated utilities business.

The company’s Competitive Energy Business segment which participates in infrastructure projects, provides energy related products to wholesale and retail customers, and sells electricity purchased on wholesale markets to retail customers.

Low Stock Price Standard Deviation & High Yield

Investing in ‘turtles’ is not right for everyone.  If you are looking for a high dividend yield, safety, and inflation matching (or beating) growth, then Consolidated Edison is a suitable investment.

The company’s stock is currently offering investors a high dividend yield of 4.2%.  For comparison, the 20 year U.S. Treasury Bond ETF (TLT) is offering investors a yield of just 2.6%.

Unlike a bond, Consolidated Edison’s dividend payments are growing (albeit slowly).  The company has managed dividend growth of 1.4% a year over the last decade.  This is about in line with inflation over the same period. The company should grow its dividend payments faster over the next decade (more on that in the future growth section of this article).

Consolidated Edison has a 10 year stock price standard deviation of just 16.7%; the second lowest of any large cap dividend stock with 25+ years of dividend payments for reference, Johnson & Johnson (NYSE:JNJ) has the lowest.

Follow Consolidated Edison Inc (NYSE:ED)
Trade (NYSE:ED) Now!

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.