Given the challenges like growing energy efficiency initiatives and renewables growth in the state, California utilities seem to have adapted their business mix in the last few years. Among the three leading utilities—PG&E (PCG), Sempra Energy (SRE), and Edison International (EIX)—Sempra Energy seems to have an edge from investors’ view. Sempra Energy’s relatively faster dividend growth, compared to its peers, is expected to accelerate due to contributions from Oncor. PG&E’s dividend growth looks dull compared to its peers.
According to Wall Street analysts’ consensus, Sempra Energy has a price target of $119.77, which implies an estimated gain of ~1% going forward. Currently, it’s trading at $118.28.
PG&E has a price target of $70.28—compared to its current market price of $69.67. It implies an estimated upside of 1% going forward.
Edison International, the smallest among the three utilities by market capitalization, has a potential gain of nearly 5%. Analysts gave it a price target of $83.84. Currently, it’s trading at $80.10.
The above chart shows analysts’ views on these utilities as of August 23, 2017. It should be noted that none of the three utilities have a “sell” rating from the analysts tracking them.
We discussed how Californian utilities yield lower than some of the industry giants. To learn more about the highest-yielding SPX utilities, read High-Dividend SPX Utilities Today: A Toe-to-Toe Analysis.