(EIX) Edison International Retained at Outperform

On Mar 14, we retained our Outperform recommendation on Edison International (EIX) following its fourth-quarter results, where reported numbers comfortably beat the Zacks Consensus Estimates. This diversified utility presently carries a Zacks Rank #2 (Buy).

Why the Reiteration?

Edison International’s fourth-quarter 2012 adjusted earnings of $1.76 per share beat both the Zacks Consensus Estimate of $1.06 and year-ago quarterly earnings of 75 cents per share.

Following the release of the fourth-quarter results, the Zacks Consensus Estimate for 2013 has gone up 7.3% to $3.51 per share as 4 of 7 estimates moved north. Moreover, the Zacks Consensus Estimate for 2014 has also increased 4.7% to $3.59 per share as 4 of 11 estimates were raised.

With its strong portfolio of regulated utility assets and well-managed merchant energy operations, Edison International presents a lower risk profile compared to its utility-only peers. With a forward-looking regulatory backup allowing the utility to file its General Rate Cases for three years, Southern California Edison has witnessed a sharp rise in its regulated rate base in recent times. Over the past five years, the regulators allowed rate base of the utility to grow by a CAGR of approximately 11%.

In Dec 2012, the company raised its annual dividend from $1.30 per share to $1.35 per share. This comes to a very competitive dividend yield of approximately 2.87%. Going forward, with the management targeting to dish out 45% 55% of Southern California Edison’s earnings as dividend, we see ample scope for dividend appreciation.

Edison Mission Group’s future growth will come from improved performance in unregulated power generation and energy trading, higher price realizations, upcoming wind projects and a strong balance sheet with no significant near-term maturities.

Other Stocks to Consider

Other stocks to consider are Pike Electric Corporation (PIKE), Brookfield Infrastructure Partners L.P. (BIP) and Otter Tail Corporation (OTTR) , all carrying a Zacks Rank #1 (Strong Buy).
BROOKFIELD INFR (BIP): Free Stock Analysis Report

EDISON INTL (EIX): Free Stock Analysis Report

OTTER TAIL CORP (OTTR): Free Stock Analysis Report

PIKE ELECTRIC (PIKE): Free Stock Analysis Report

To read this article on Zacks.com click here.

About vitalstocks

This is a sample profile field. Vitalstocks is the operating company for Stockbloghub. This will place the picture of the author or company in the profile. Here is another extra line of information.


Powered by Facebook Comments

Similar Posts: | | | | | | | | Electric Utilities | Utilities

RSS feeds: BIP | Brookfield Infrastructure Partners L.P. | Edison International | EIX | Otter Tail Corporation | OTTR | PIKE | Pike Electric Corporation | Electric Utilities | Utilities |

Other Posts by | RSS Feed for this author