Covered — regulated, growing, heavy build. A 2.34% yield on a 51% payout is covered, regulated income: $0.24 a quarter, raised from $0.23 in the September 2026 declaration, against full-year 2026 non-GAAP EPS guidance of $1.89–$1.91 a share — the $0.96 annual dividend sits at about 51% of the $1.90 guidance midpoint. Second-quarter non-GAAP EPS was $0.40, above the $0.37 consensus, on revenue of $2.15 billion, and the company reiterated guidance at least at the midpoint, implying about 8% earnings growth over 2025. The business is regulated electric transmission and distribution and natural gas distribution serving more than 7 million metered customers in Texas, Indiana, Minnesota and Ohio — the steadiness is structural, and the growth driver is visible: more than 17 gigawatts of large-load projects submitted through ERCOT's Batch Zero process, about 14 gigawatts expected to be eligible, against a current Houston peak demand of 21 gigawatts.
Key risk: Capital-plan funding — the ten-year plan was raised by $1.2 billion to $66.7 billion for 2026–2035, with $6.8 billion planned for 2026 alone. If the Houston large-load queue converts slowly, or rate recovery lags the spend, the 51% payout leaves less room than it appears to — though the $2.62 billion Ohio gas sale closed October 1, 2026 helps fund the build without new equity for the increase.
Changes if: The payout pushes well past ~51% toward 65% or more, the ten-year capital plan requires equity beyond the current financing guide, or the Houston large-load queue stalls instead of converting to energized demand. On guided earnings the dividend is covered today.
- ✓Payout-coverage check: 51% of guided earnings — $0.96 indicated against 2026 non-GAAP EPS guidance of $1.89–$1.91 — leaves about half of earnings behind the dividend, and second-quarter non-GAAP EPS of $0.40 covered the $0.24 quarterly rate on its own.
- ✓Dividend growth check: Four consecutive years of increases, most recently to $0.24 a quarter from $0.23, following $0.22 through 2025 — steady raises on a regulated base, with management targeting 7%–9% annual EPS growth through 2035.
- !Capital-plan check: A $66.7 billion ten-year investment plan, $6.8 billion of it in 2026, funded with debt, customer demand charges and asset-sale proceeds — including the $2.62 billion Ohio gas sale closed October 1, 2026 — means the dividend's future depends on regulators allowing recovery of that spend and on the Houston load queue converting on schedule.
What this grade doesn't say: It screens the dividend only — covered, real, compounding. It says nothing about valuation or price: a well-covered payer can still be overpriced, and its price can still fall.