Currently, PPL (PPL) is trading at a forward PE ratio of 13x based on analysts’ EPS estimates for the next 12 months. PPL stock looks attractive considering broader utilities’ (XLU) average valuation close to ~18x. PPL’s five-year historical average valuation is ~14x. The valuation has risen more than 18% over the past 12 months and marginally underperformed broader utilities. PPL is trading at a dividend yield of 5.1%, which is significantly higher than peers’ average. PPL’s relatively stable earnings growth enables stable dividend growth.
Edison International (EIX) stock has notably underperformed its peers since the wildfires last year. The stock is trading at a forward PE ratio of 14.3x, which is lower than peers’ average. The company’s historical average valuation is close to 18x. Edison International appears to be trading at a discounted valuation compared to its peers and its historical average. Edison International is trading at a dividend yield of 3.8%, which is higher than utilities as a whole.
What differentiates Edison International from its peers is its dividend growth in the last few years. The company increased its dividends 12.4% compounded annually in the last five years. On average, utilities increased their dividends ~4% during the same period. Sempra Energy (SRE) is trading at a forward PE ratio of 20x.
AES (AES) stock is trading at a forward PE ratio of 13.2x. AES’s historical average PE ratio is higher than the forward multiple. The stock appears to be trading at an attractive valuation. AES offers a yield of 3%. The company managed to raise its dividends 26% compounded annually in the last five years. AES stock rose ~70% over the past 12 months. To learn more, read What led to AES’s Rally and Where It Could Go from Here.