Covered — regulated, slow, steady. A 3.5% yield on a 65% payout is covered, regulated income: $1.085 a quarter, raised in July 2026 for the twentieth consecutive year of increases, at about 2% a year over the past five. Second-quarter adjusted EPS was $1.43, above the $1.30 consensus, and full-year 2026 guidance of $6.55–$6.80 puts the $4.34 annual dividend at roughly 64–66% of guided earnings. The business is regulated electric and gas service to about 8.4 million customers across the Carolinas, Florida, Indiana, Ohio and Kentucky — the steadiness is structural, and so is the growth rate: slow by design.
Key risk: Capital-plan funding — the regulated build runs above $1 billion a month, funded with debt and ATM equity ($600 million priced year to date), targeting 14.5% funds from operations to debt in 2026. If rate cases disappoint or funding costs rise, the 65% payout leaves less room than a lower-payout utility's would.
Changes if: The payout pushes well past ~65% toward 75% or more, funds from operations to debt stalls below the 14.5% target, or the run of annual raises stops. On guided earnings the dividend is covered today.
- ✓Payout-coverage check: 65% of earnings — $4.34 indicated against 2026 guidance of $6.55–$6.80 — leaves about a third of earnings behind the dividend.
- ✓Dividend growth check: Twenty consecutive years of increases, about 2% a year over the past five, on top of 99 consecutive years of quarterly payments — slow growth, uninterrupted.
- !Capital-plan check: Net debt to EBITDA of 5.4× and a build program above $1 billion a month, funded with new debt and equity, mean the dividend's future depends on regulators allowing recovery of that spend.
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.