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How Edison International Stock Looks after Its Q1 Earnings

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May. 2 2019, Updated 8:40 a.m. ET

Edison International 

Edison International (EIX) stock fell more than 5% on May 1 due to its weak first-quarter earnings. The company reported its first-quarter earnings after the markets closed on April 30. Edison International posted an adjusted EPS of $0.63, which missed analysts’ estimates by a wide margin for the quarter ending March 31. For the first quarter of 2018, the company reported an EPS of $0.80. Higher operations and maintenance expenses for wildfire mitigation had a negative impact on Edison International’s first-quarter earnings.

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So far, Edison International stock has risen 6% this year. The stock has underperformed broader utilities (XLU). Edison International had a huge weakness in November after wildfires in the state.

For the first quarter, Edison International reported total revenues of $2.82 billion—an increase of more than 10% YoY (year-over-year).

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Valuation

The recent fall in Edison International stock could be an attractive opportunity. The stock is trading at 13.6x its forward earnings—notably lower than its five-year historical average. The stock looks attractive compared to peer utilities, which are trading at an average forward valuation of 17x–18x.

Edison International’s dividend profile also looks attractive with its above-average dividend growth. The company increased the dividends 12.4% compounded annually in the last five years—almost triple utilities’ (XLU) (VPU) average. Edison International is trading at a yield of 3%, which is largely in line with its peers.

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