Coronation! [ED]

It’s March 26, 1823, and a group of New York City investors decide that candles just aren’t cutting it at night. They start the New York Gas Light Company and set out to light up some streets in Lower Manhattan. Within a year the company is listed on the New York Stock Exchange. Nearly 60 years pass and a company that has already gone through several changes expands into the delivery of two more sources of energy: steam and electric.

Now, if you think glossing over 60 years is lazy, please read on. Fast forward another 140 years and you can still find this company doing business. Today, it is the result of acquisitions, dissolutions, and mergers of 170+ individual companies operating in the electric, gas, and steam industries. You might say it has consolidated into what we know today.

On January 18, 2024, this now consolidated utility announced the 50th consecutive annual increase to their quarterly dividend. I was not present for this landmark decision, but I’ll bet there was electricity in the air and a certain energy in the room. Folks, another Dividend King has joined the Royal Dividends Empire.

All hail Consolidated Edison Inc!

A City That Never Sleeps

Referring to New York City, Frank Sinatra sang ‘I want to wake up in a city that never sleeps’. If you’ve ever been walking around Times Square long after the sun has gone down, wondering how it could still be so damn bright outside, then you should have an idea of what Ol’ Blue Eyes was singing about. And you can thank (blame?) Consolidated Edison [ED].

ConEd (for short1) has much to do with gas, steam and electricity, but so far as I can tell, they have little to do with Thomas Edison. Apparently, due to the relatively short duration of patents issued at the time, Mr. Edison allowed electric utilities to use his patents in exchange for using his name. Of course, it is not difficult to imagine that there was also monetary compensation. In those days, many such utilities had ‘Edison’ somewhere in their name, but ultimately were not affiliated directly with the man, or each other, for that matter.

ConEd has been around for 200 years and paid out dividends since 1885, an amazing 139 years. And half a century ago, they embarked on a streak of increasing that dividend every year. Allow that to sink in before reading a brief summary of what ConEd is and its place within the realm of Dividend Kings.

According to TD Ameritrade:

Consolidated Edison, Inc. is a holding company that provides energy-related products and services through its subsidiaries. The Company’s subsidiaries include Consolidated Edison Company of New York, Inc. (CECONY), a regulated utility providing electric service in New York City and New York’s Westchester County, gas service in Manhattan, the Bronx, parts of Queens and parts of Westchester and steam service in Manhattan, and Orange and Rockland Utilities, Inc. (O&R), a regulated utility serving customers in a 1,300-square-mile-area in southeastern New York State and northern New Jersey. Its subsidiaries also include Con Edison Transmission, Inc. (Con Edison Transmission), which invests in electric transmission projects in transition to clean and renewable energy. Con Edison Transmission manages both electric and gas assets that are focused to develop electric transmission projects in New York, New England, the Mid-Atlantic states, and the Midwest.

ConEd becomes the 10th Dividend King from the Utilities sector. Below is a list of all the Kings in the Utilities sector and the industry in which they conduct their business.

CompanyTickerIndustry
American States Water CoAWRWater Utilities
Black Hills CorpBKHMulti-Utilities
Canadian Utilities LtdCDUAFMulti-Utilities
California Water Service GroupCWTWater Utilities
Consolidated Edison IncEDMulti-Utilities
Fortis IncFTSElectric Utilities
Middlesex Water CoMSEXWater Utilities
National Fuel Gas CoNFGGas Utilities
Northwest Natural Holding CoNWNGas Utilities
SJW GroupSJWWater Utilities

While 8 of the 10 utilities above are listed on the New York Stock Exchange, ConEd is the longest continuously listed company on the exchange. Further, it is the only company in the table above that qualifies for inclusion in the S&P 500 Index.

BKH and NFG represent the utilities sector within the Portfolio for the Ages, and each has been a disappointment. However, the entire Utilities sector underperformed the broader market in 2023 and things should turn around. That being said, there may come a day when the portfolio could use another utility and there are plenty to choose from. That day could be decades away, and I am pretty certain ConEd will still be around.

  1. ‘ConEd’ is longer than the ticker symbol ‘ED’ which I would typically use, so I am not sure why I chose to use the nickname or frankly, why I chose to type out this footnote. ↩︎
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