3/8/25

Evergy, Inc. (EVRG) is a major electric utility serving customers across Kansas and Missouri. As a regulated utility, the company benefits from a stable revenue stream, which is a key reason many dividend investors are drawn to it. The business model is straightforward—Evergy generates electricity, delivers it to millions of homes and businesses, and collects revenue from customers on a recurring basis.

Unlike high-growth stocks that rely on constant innovation, Evergy’s value lies in its consistency. Investors looking for a dependable source of dividend income often turn to utility stocks, and Evergy has proven itself to be a steady performer in that regard. But does it still hold up as a solid income investment today? Let’s take a closer look at the dividend, financial health, and stock performance to see where it stands.

🔹 Key Dividend Metrics

📌 Dividend Yield: 4.06%
📌 Annual Dividend: $2.67 per share
📌 5-Year Average Yield: 3.87%
📌 Payout Ratio: 68.47%
📌 Ex-Dividend Date: March 10, 2025
📌 Next Payment Date: March 21, 2025

Dividend Overview

Evergy’s 4.06% dividend yield makes it an attractive option for income investors, particularly in a market where bond yields have become more competitive. This yield is slightly above the company’s five-year average of 3.87%, showing that investors are currently getting a slightly better-than-usual return on their investment.

The company’s payout ratio sits at 68.47%, which is reasonable for a utility. Utilities generally operate with higher payout ratios than other sectors because their business models provide predictable cash flow, allowing them to return more capital to shareholders without jeopardizing financial stability.

For those seeking a stock that provides a consistent and reliable dividend, Evergy checks the right boxes. The company has maintained steady payouts over the years, with small but regular increases that make it appealing for long-term income-focused investors.

Dividend Growth and Safety

Evergy isn’t known for rapid dividend growth, but it does offer a slow and steady increase in payouts. Unlike high-yield stocks that may carry the risk of cuts during tough times, Evergy’s dividends are well-supported by its stable cash flow and earnings.

Factors Supporting Dividend Safety

✔ Predictable revenue from regulated electricity services
✔ Essential business model that remains stable even during recessions
✔ Moderate payout ratio that leaves room for continued payments
✔ History of maintaining and gradually increasing dividends

The company’s cash flow remains strong, with an operating cash flow of nearly $1.98 billion over the past year. This is a crucial metric because, ultimately, dividends are paid from cash flow, not just net income.

That said, Evergy does have a high debt load, which is common for utility companies due to their capital-intensive nature. With a debt-to-equity ratio of 142.31%, it’s important that management continues to manage this carefully. As long as cash flow remains steady and rates don’t spike dramatically, the company should be able to sustain its dividend without issues.

Chart Analysis

The stock chart for Evergy, Inc. (EVRG) shows a well-defined upward trend over the past year, with the price consistently trading above both the 50-day and 200-day simple moving averages. This suggests a strong bullish bias, but recent price action indicates some pullback from its recent highs.

Price Trend and Moving Averages

The price has been climbing steadily, especially since the latter half of last year. The 50-day moving average has acted as a dynamic support level, with the stock bouncing off it multiple times during the uptrend. The 200-day moving average is also sloping upward, reinforcing the longer-term bullish trend.

Recently, however, the stock experienced a pullback after reaching new highs, with price declining from its recent peak above $70. This could indicate either a temporary pause in the uptrend or the beginning of a consolidation phase.

Volume Activity

Volume has been relatively steady but shows spikes during periods of strong upward movement, which suggests institutional buying. There have also been some high-volume red bars, indicating strong selling pressure on down days. The most recent trading sessions show increased volume alongside the price pullback, which may suggest some profit-taking or a shift in momentum.

Relative Strength Index (RSI)

The RSI, which measures overbought and oversold conditions, was recently in the overbought territory but has started to decline. This suggests that the stock may be cooling off after a strong rally. If RSI moves toward 30, it could indicate an oversold condition and a potential buying opportunity, but if it stays elevated, it may suggest the uptrend still has legs.

Recent Price Action

The last five trading sessions show some selling pressure, as the stock has formed small-bodied candles with upper wicks, indicating that buyers attempted to push the price higher but faced resistance. The most recent close at $65.80 is still well above the 50-day moving average, meaning the uptrend remains intact unless further downside pressure develops.

The stock briefly tested a high of $66.87 during the session but pulled back, suggesting that resistance exists in that range. The low of $65.65 for the day is still relatively close to the close, meaning there wasn’t a significant breakdown, but buyers may need to step in to prevent further declines.

Analyst Ratings

Evergy, Inc. (EVRG) has received a mix of upgrades and downgrades from analysts recently, reflecting differing views on its financial position and future performance. Some firms see strong growth potential, while others are more cautious about near-term challenges.

🔼 Upgrades

📈 Guggenheim – Upgraded Evergy from Neutral to Buy and raised the price target from $56 to $71. The firm pointed to the utility sector’s undervaluation and strong potential for outperformance in 2025. Analysts believe Evergy is well-positioned for steady revenue growth and an attractive dividend yield, making it a solid investment in the current market.

📊 Ladenburg Thalmann – Moved Evergy from Neutral to Buy with a price target increase from $59 to $68.50. Analysts highlighted improving financials, particularly in revenue and cash flow stability. The firm sees a stronger regulatory environment and potential rate adjustments that could benefit the company’s long-term earnings.

🔻 Downgrades

⚠️ Barclays – Adjusted its price target from $65 to $62, maintaining an Overweight rating. Analysts expressed concerns over rising operational costs and how they may affect future profit margins. While Evergy remains a strong player in the sector, the firm believes near-term challenges could limit its upside.

🔍 Guggenheim – Lowered the price target from $56 to $52, keeping a Neutral stance. The downgrade was based on concerns about cost pressures and potential regulatory hurdles that could impact earnings growth. Analysts emphasized that while Evergy has long-term stability, investors should be mindful of short-term volatility.

🎯 Consensus Price Target

The average analyst price target for Evergy is currently $66.79, suggesting modest upside from current levels. The mix of ratings indicates a balanced outlook, with some firms expecting steady growth while others see potential challenges ahead.

Earning Report Summary

Evergy just released its latest earnings report, and overall, it was a solid showing. The company pulled in $873.5 million in GAAP earnings, which works out to $3.79 per share, up from $3.17 per share the previous year. Adjusted earnings, which strip out one-time items, landed at $3.81 per share, an improvement from last year’s $3.54 per share. That kind of steady growth is exactly what long-term investors like to see.

Quarterly Performance

For the most recent quarter, Evergy reported $2.02 per share in GAAP earnings, compared to $1.53 per share in the same quarter last year. That’s a nice jump, and a big part of the reason was new retail rates and increased infrastructure investments. That said, not everything was perfect. Cooler-than-usual summer weather meant less demand for electricity, and at the same time, depreciation costs crept higher, putting a little pressure on margins. But overall, the numbers suggest Evergy is managing well despite these minor headwinds.

Dividend Growth

If you’re in Evergy for the income, there’s good news—the board raised the quarterly dividend by 4 percent to $0.6675 per share. That means shareholders will be getting a little more cash in their pockets each quarter, reinforcing the company’s commitment to returning value to investors.

Future Plans

Looking ahead, Evergy is making some big investments to keep its infrastructure strong. The company laid out a $16.2 billion capital plan that stretches through 2029, with a focus on grid reliability and expanding energy capacity. A major highlight of this plan is the construction of two new high-efficiency natural gas plants in Kansas, aimed at keeping up with growing energy demands.

Earnings Outlook

Evergy reaffirmed its earnings guidance for 2024, sticking with a projected range of $3.73 to $3.93 per share. For 2025, they’re forecasting $3.92 to $4.12 per share, with long-term EPS growth expected to land in the upper half of its 4 to 6 percent range starting in 2026. That’s not explosive growth, but it’s steady and reliable—exactly what you’d expect from a well-run utility company.

Operations and Regulation

On the operations side, Evergy made progress in resolving regulatory issues, including reaching a settlement agreement in its Missouri West rate case. This deal still needs official approval, but it’s expected to be a fair compromise for both the company and its customers. Evergy is also investing heavily in renewable energy and grid modernization, which should help maintain efficiency while keeping costs manageable for customers.

Overall, this earnings report showed that Evergy is sticking to its playbook—steady earnings growth, infrastructure investment, and shareholder returns. There are always a few challenges in the utility sector, but Evergy looks well-positioned to navigate them while continuing to deliver for its investors.

Financial Health and Stability

A strong balance sheet is key to ensuring long-term dividend stability. Evergy has a solid profit margin of 14.94% and an operating margin of 17.37%, both healthy figures for a utility company.

Cash flow remains positive, with nearly $2 billion in operating cash flow, though levered free cash flow is negative, largely due to the company’s ongoing investments in infrastructure and network improvements. This is typical for the sector, as utilities must constantly invest in maintaining and upgrading their electrical grids.

However, the company has very little cash on hand—just $22 million, which is low relative to its $14.22 billion in total debt. This means Evergy relies on consistent revenue streams and access to capital markets to fund operations and maintain its dividend. While this isn’t a red flag for a regulated utility, it’s something to watch.

Valuation and Stock Performance

Evergy’s stock is neither overvalued nor significantly undervalued. It trades at a price-to-earnings ratio (P/E) of 17.36, which is reasonable for a company with stable earnings. The forward P/E of 16.37 suggests that analysts expect moderate earnings growth over the next year.

Other key valuation metrics:

✔ Price-to-Book Ratio: 1.52 – Slightly above its historical average
✔ Enterprise Value/EBITDA: 11.05 – In line with utility sector peers
✔ PEG Ratio: 1.78 – Suggests fair valuation relative to growth expectations

The stock has been moving in a stable range, currently trading 27% above its 52-week low of $49.55, but still below its 52-week high of $69.93. The 50-day moving average is $64.44, indicating that the stock has been gradually trending higher.

For investors who prioritize dividend stability over price appreciation, Evergy remains a strong choice. However, those looking for growth may find the stock’s upside potential limited.

Risks and Considerations

No stock is without risks, and Evergy has a few factors that investors should keep in mind.

🔹 Regulatory Risks – Since Evergy operates as a regulated utility, it must adhere to strict government oversight. Rate changes and regulatory decisions can impact revenue growth.
🔹 High Debt Levels – While debt is normal for utilities, Evergy’s 142% debt-to-equity ratio means it carries a significant financial burden. Rising interest rates could make borrowing more expensive.
🔹 Slow Growth – Investors seeking strong capital appreciation may find Evergy’s stock performance uninspiring. The primary reason to own this stock is for the dividend, not rapid share price growth.
🔹 Interest Rate Sensitivity – As interest rates rise, income investors often shift money from dividend stocks to bonds, which can put pressure on utility stock prices.

Despite these risks, Evergy’s recession-resistant business model and steady cash flow provide a strong foundation for long-term dividend stability.

Final Thoughts

Evergy is a classic dividend stock—not flashy, not high-growth, but steady and reliable. Its 4.06% dividend yield, reasonable payout ratio, and predictable cash flow make it a solid option for income-focused investors who want consistency over excitement.

The company’s debt levels are on the higher side, but that’s typical for utilities. As long as Evergy maintains its strong cash flow and keeps up with regulatory changes, the dividend should remain safe.

For investors looking for a dependable income stream, Evergy remains a strong choice. While it may not offer significant share price appreciation, it provides steady income in a defensive sector, making it a compelling option for long-term, dividend-focused investors.