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Edison International Stock Compared to Its Peers

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Jun. 26 2019, Updated 11:36 a.m. ET

Edison International

Edison International (EIX) stock offers a potential upside of 10% for the next 12 months. Based on the consensus estimates, Edison International has a median target price of $71.9 compared to its current market price of $65.4. Among the 16 analysts tracking Edison International stock, seven recommended a “hold,” six recommended a “buy,” and three recommended a “strong buy.”

California’s governor, Gavin Newsom, proposed having a wildfire fund. The fund might place state utilities in a relatively better place to help pay for the related liabilities. Edison International stock has rallied more than 15% in 2019. The stock has largely tracked broader utilities.

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Dividend yield

Currently, Edison International offers a dividend yield of 4.0%, which is higher than the average industry yield. Edison International’s upside based on analysts’ estimates and its attractive dividend yield show striking total return potential. The company’s five-year dividend growth rate was 12% compounded annually. During the same period, broader utilities managed to increase their dividends ~4%.

Edison International stock is trading at a forward PE ratio of 14x based on its estimated EPS for the next 12 months—much lower than utilities’ (XLU) average. Edison International’s five-year historical average valuation is ~18x. The stock seems to be trading at a discounted valuation compared to its peers.

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