ED, Consolidated Edison Inc
Read top to bottom, the owner's questions in the order an owner asks them: what the business is, whether the record holds, whether it survives and is any good, and what you would be paying. New to the questions? Start with the Method.
The business in brief
What this business is and what moves its needle, read from the numbers in its filings. The quantitative detail is in the sections below; the verdict is left to you.
- What it is
- Revenue is led by Electric (74%) and Gas (21%), with 3 more lines behind.
- What moves the needle
- How hard the assets work, and what the inputs cost. What decides it: utilization, how much of the capex merely keeps the assets running, and what a downturn does to a heavy fixed-cost base.
- Is it a good business?
- Return on capital has rarely cleared the cost of capital (median 6%, above 15% in 0 of 10 years). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the 10-K is where you look.
Every line here is arithmetic from the company's own filings, not a model's opinion, and each figure appears in full in the sections below.
Where the money comes from
read the 10-K →Electric is 74% of revenue, so this is largely a single-line business.
- Electric74%$12.6B
- Gas21%$3.6B
- Steam4%$703M
- Non-utility0%$3M
- Other revenues-1%($131M)
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record, 2016–2025
realized figures from each filing, no estimates| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| RevenueRevenue | $12.1B | $12.0B | $11.9B | $12.1B | $12.0B | $13.5B | $15.5B | $14.5B | $15.5B | $17.0B | $17.4B |
| Operating marginOp. mgn | 23.0% | 23.1% | 22.3% | 22.0% | 22.1% | 21.0% | 17.0% | 22.1% | 17.3% | 17.2% | 17.2% |
| Net incomeNet inc. | $1.2B | $1.5B | $1.4B | $1.3B | $1.1B | $1.3B | $1.7B | $2.5B | $1.8B | $2.0B | $2.2B |
| EPS (diluted)EPS | $4.12 | $4.94 | $4.42 | $4.08 | $3.28 | $3.85 | $4.67 | $7.21 | $5.24 | $5.64 | $5.92 |
| Owner earningsOwner earn. | ($1.8B) | ($239M) | ($2.6B) | ($542M) | ($1.9B) | ($1.2B) | ($530M) | — | — | — | ($328M) |
| ROICROIC | 6% | 7% | 6% | 6% | 6% | 6% | 5% | 6% | 5% | 5% | 5% |
| CapexCapex | $5.2B | $3.6B | $5.2B | $3.7B | $4.1B | $4.0B | $4.5B | — | — | — | $4.5B |
| Capex / revenueCapex/rev | 43.4% | 30.0% | 44.0% | 30.3% | 34.0% | 29.5% | 28.9% | — | — | — | 25.7% |
| Capex vs depreciationCapex/dep | 4.31× | 2.69× | 3.65× | 2.18× | 2.13× | 1.95× | 2.17× | — | — | — | 1.92× |
| Total debtDebt | $14.8B | $16.0B | $18.1B | $20.0B | $22.3B | $23.0B | $23.4B | $22.2B | $24.7B | $25.8B | $25.8B |
| Cash & investmentsCash+inv | $776M | $797M | $895M | $981M | $1.3B | $992M | $1.3B | $1.2B | $1.3B | $1.6B | $147M |
| Net debt / (cash)Net debt | $14.0B | $15.2B | $17.3B | $19.0B | $21.1B | $22.1B | $22.2B | $21.1B | $23.4B | $24.2B | $25.7B |
Owner’s Scorecard
Will it survive?
- AdequateOperating income $2.9B ÷ interest expense $1.2B
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
- HighTotal debt $25.8B ÷ operating income $2.9B
Years of operating profit it would take to repay all debt. A first read, not a credit rating: it's gross debt (not netted against cash) over EBIT (not EBITDA), and a cyclical year distorts it.
- Debt, net of cash $24.2BHeavy net debtCash $1.6B − debt $25.8B
Netting $1.6B of cash and short-term investments against $25.8B of debt leaves $24.2B owed, about 8.2× a year's operating profit, versus the gross figure above. Net debt is the leverage figure that matters; the gross ratio above ignores the cash already set against it. Strategic or illiquid investments aren't counted here.
- Not enough data
The filing data didn't include the inputs for this check.
Is it a good business?
- Below averageNOPAT $2.3B ÷ invested capital $48.4B (debt + equity − cash)
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; below ~8% the company may destroy value as it grows. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- ThinOwner Earnings $335M = operating cash $4.8B − capex $4.5B
What an owner could take out without starving the business. That's 2% of revenue. Honest caveat: capex here blends maintenance and growth, so steady-state Owner Earnings may run higher (see capex vs. depreciation).
- Cash-backedCash from ops $4.8B ÷ net income $2.0B
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Returns most of itDividends + buybacks $1.2B ÷ Owner Earnings $335M
Of $335M Owner Earnings, $1.2B (348%) went back to shareholders, $1.2B dividends, $0 buybacks. Returning most of it signals a mature cash machine; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
- Investing or harvesting? 1.92×ExpandingCapex $4.5B ÷ depreciation $2.3B
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Durability & moat, 2016–2025
A moat is a high return that doesn’t fade, reinvested at high returns. Here is what the record says, judgments, not another chart of the numbers.
- Profitable years 10 of 10
Never lost money over the record, the earnings stability Graham insisted on.
- Return on capital ≥ 15% 0 of 10 yrs
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 23% (FY2016) → 17% (FY2025)
Margins slipped over the record, competition or costs are biting in.
- Reinvestment, incremental ROIC 3%
Reinvested capital earned only a modest return, growth is getting expensive.
- Worst year 2022 · 17.0% op. margin
Stayed profitable even in its hardest year, the resilience that survives recessions.
- Share count +1.9%/yr
The share count is rising, dilution works against you on a per-share basis.
- Dividend record rising
Paid and raised the dividend across the record, the continuity Graham prized.
Solvent is not the same as cheap; growing is not the same as good. These are vital signs, not a verdict, the judgment is yours, and the filing is one click away.
How the cash was used, 2016–2025
Over the record, the business generated $32.1B of operating cash, and how management split it is, as Buffett insists, the job that matters most. Here it reads as a reinvestor, most operating cash is plowed back into the business.
- Reinvested$30.3B · 94%
- Dividends$9.8B · 31%
- Buybacks$1.0B · 3%
It reinvested $30.3B (94%) back into the business and returned $10.8B (34%) to owners, $9.8B in dividends, $1.0B in buybacks. Total debt rose $11.0B across the span. It returned and reinvested more than it generated, the gap was covered by debt or existing cash.
Buybacks are gross of stock issued to employees; net of that, the real return to owners is lower (see Management & pay). And the mix alone doesn't grade management, what matters is the return earned on the dollars reinvested (see incremental ROIC in the durability report).
Graham’s defensive-investor test
4 of 6 metGraham gave the defensive investor seven numerical criteria in The Intelligent Investor. Here they are, run mechanically on the filings, his framework, not our verdict. Meeting them is a floor of safety, not a reason to buy; missing one is no veto, since many fine modern businesses fail his strictest liquidity tests by design. The worth is in seeing exactly where a company stands against the canon, every number sourced.
- Adequate size PassRevenue ≥ $2B · $17.0B
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity MissCurrent ratio ≥ 2× · 1.02×
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt MissDebt ≤ working capital · $25.8B vs $136M WC
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability PassA profit every year (10-yr record) · no losses
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record PassUninterrupted dividends · paid every year (10)
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth PassEarnings +33% over the record · +53%
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Earnings are $5.64/share and book value $67.44/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Graham would be the first to say a checklist is a starting point, not an answer. These are his defensive, bargain-hunter's tests, the cigar-butt lens. Buffett and Munger grew past it, paying fair prices for wonderful businesses; that lens lives in the moat and owner-earnings work above, and both still matter. Clearing Graham’s tests earns a closer look; failing them earns harder questions, not a dismissal.
What the price implies
reverse-DCFOwner earnings are negative today, so the usual reverse-DCF has nothing to grow. But that's exactly when a price makes its boldest promise. So we flip the question: type a price, and see the future profitability you'd have to believe to justify it.
Enter a price to run it.
It flips the reverse-DCF: the company must reach owner earnings that, valued at a mature multiple and discounted back at your rate, equal today's market cap, shown as the margin it must earn on revenue grown at your rate, from negative today. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this is for the genuinely unprofitable.
Peers, Utilities
The same industry, side by side on owner economics, compare, don't rank by a single number.● marks best in the group.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| EXCExelon Corporation | $24.3B | — | 21.2% | 5% | -9% |
| EDConsolidated Edison Inc | $17.0B | — | 17.2% | 5% | 2% |
| SRESempra | $12.4B | — | 32.8% | 5% | -49% |
| PEGPublic Service Enterprise Group Inc | $12.2B | 75% | 24.5% | 7% | 0% |
| XELXcel Energy Inc | $11.5B | 67% | 22.4% | 5% | -59% |
| WECWEC Energy Group, Inc. | $9.8B | 67% | 22.9% | 6% | 7% |
| AEEAmeren Corp | $8.8B | — | 23.0% | 6% | -9% |
| CMSCMS Energy Corp | $8.3B | — | 20.8% | 5% | -2% |