The board of directors of Edison International EIX has approved a 13% increase in its quarterly dividend rate. The revised dividend of 54.25 cents per share will be distributed on Jan 31, 2017 to shareholders of record at the close of business on Dec 30, 2016.
The latest hike marks an increase of 6.25 cents from the prior payout of 48 cents per share. The new annualized dividend amounts to $2.17 per share, up from $1.92 paid earlier, resulting in a dividend yield of 3.13%.
Notably, this is the 13th consecutive year of a dividend hike by Edison’s management.
Solid Asset Portfolio & Operating Profile
With a strong portfolio of regulated utility assets and well-managed merchant energy operations, Edison presents a lower risk profile than its utility-only peers. In addition, the company boasts a solid financial position backed by a strong cash generation capacity. As of Sep 30, 2016, Edison International had cash and cash equivalents of $84 million. In addition, the company continues to show efficiency in terms of reporting a stable cash inflow through operating activities. The company’s cash flow from operating activities in the first nine months of 2016 was $2,500 million.
A stable financial position enables Edison International to maximize shareholder value through the payment of regular dividends and repurchase of shares. Moreover, the company is on track to achieve the targeted payout ratio of 45–55% of its subsidiary Southern California Edison’s earnings. These initiatives will allow the company to retain investor interest in the stock.
Edison has outperformed the Zacks categorized Utility-Electric Power industry over the last 12 months. Share price of Edison surged 17.9% during this time frame, compared with the industry’s gain of 7.8%.
Dividend growth prospects, a constructive regulatory environment, and no equity requirements are fuelling investor interest in the stock and in turn, its price.
Zacks Rank & Key Picks
Edison carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the same space include Avista Corp. AVA, Ameren Corporation AEE and DTE Energy Company DTE.
Avista has seen one upward estimate revision for 2016 over the last 60 days. During this period, its estimates increased from $2.08 to $2.09. The stock carries a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ameren Corp., another Zacks Rank #2 stock, has seen five upward estimate revisions for 2016 over the last 60 days. During this period, its estimates increased 6.7% from $2.53 to $2.70.
DTE Energy has seen three upward estimate revisions for 2016 over the last 60 days. DTE Energy carries a Zacks Rank #2 as well. During this time frame, its estimates were up 2.1% from $5.16 to $5.27.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
AMEREN CORP (AEE): Free Stock Analysis Report
EDISON INTL (EIX): Free Stock Analysis Report
DTE ENERGY CO (DTE): Free Stock Analysis Report
AVISTA CORP (AVA): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research