Is PSEG’s Dividend Enough To Make Up For Its Lagging Stock Price?
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Public Service Enterprise Group (PEG) (PEG) operates PSE&G, the utility that sells electricity and gas to New Jersey homes and businesses, and pays a dividend to shareholders. The stock offered a 3.6% dividend yield at the October 27, 2026 close. The share price, though, has lagged far behind the S&P 500 over the past five years. Once every dividend is counted, what do you guess a five-year PSEG holder made next to the market?
How Far Has PSEG Stock Trailed The Market?
On price alone, PSEG stock rose 16.6% over the past five years, compared with a 70.8% gain for the S&P 500. A PSEG shareholder missed most of the broader market’s rise, finishing 54.2 percentage points behind the index in price terms.
How Much Did PSEG’s Dividends Add?
Reinvesting dividends brought PSEG stock to a 37.9% return over the same five years. The payouts alone added 21.3 percentage points of that return. This means more than half of what a PSEG shareholder earned came from the dividends, not from the share price.
Did The Dividends Close The Gap For PSEG Holders?
Here is how PSEG and the S&P 500 compare over those five years, on price alone and with dividends.
| Return from Oct 19, 2021 to Oct 27, 2026 | On price alone | With dividends reinvested |
|---|---|---|
| The stock | +16.6% | +37.9% |
| S&P 500 | +70.8% | +82.2% |
Before taxes and costs. The S&P 500 is measured through the SPDR S&P 500 ETF.
With its own dividends counted, the S&P 500 returned 82.2%, leaving PSEG holders still trailing the market by 44.2 percentage points. PSEG’s dividends added more than the market’s, which contributed 11.4 points. Even so, the gap shrank by only about 10 points once distributions were counted on both sides. PSEG’s dividends closed a small part of the gap, because the S&P 500 paid its holders dividends too.
What This Means If You Own PSEG For Income
Over the past year, PSEG’s share price fell 12.4% while the S&P 500 rose 13.6%. Dividends added 3.0 percentage points to the utility’s return, compared with about 0.9 points for the S&P 500’s dividends. That extra income is real, but it is small next to the one-year gap: even with dividends counted, PSEG trailed the S&P 500 by 24.0 percentage points.
PSEG pays its dividend from a business that sells electricity and gas, generating most of its sales from its New Jersey utility, PSE&G. On the August 4, 2026 call, management said PSEG’s balance sheet can fund its five-year capital investment program without issuing new equity or selling assets, and gives the company the opportunity for “consistent and sustainable dividend growth.”
For anyone who holds PSEG for income, the one number to watch is its return with dividends against the S&P 500’s return with dividends. Check this comparison again after the next quarterly report, expected in November 2026.
Does This Mean You Should Act On PEG?
Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.
There is a smarter approach. Since its inception, the Trefis High Quality (HQ) Portfolio has returned 105%, beating the benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking. If that is how you want to invest, the HQ Portfolio is the place to start.
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