Edison International (EIX) Announces Dividend Hike of 5.8%
Edison International EIX recently announced that its board of directors has approved a 5.8% increase in the quarterly dividend rate. The revised quarterly dividend will be 78 cents, payable on Jan 31, 2024, to shareholders of record at the close of business on Dec 29, 2023.
The company’s new annualized dividend rate is $3.12 per share, resulting in a dividend yield of 4.46%, based on its share price as of Dec 19, 2023. This marks the 20th straight year of increase in annual dividend rate, reflecting its strong performance. The current dividend yield is better than that of the Zacks S&P 500 composite’s 1.39%.
EIX’s History of Dividend Payment
The companies that are involved in utility services generally have stable operations and earnings. Consistent performance and the ability to generate cash flows allow utilities to reward shareholders with regular dividends.
Edison International has been consistently increasing dividends since 2004 at a CAGR of 7.1%.
Can We Expect Hikes in the Coming Years?
Dividend hikes are backed by a company’s financial strength and ability to generate enough cash to reward shareholders with impressive returns.
As of Sep 30, 2023, Edison International had a total cash and cash equivalents of $446 million, up significantly from the prior quarter level of $195 million. For the nine months ended Sep 30, 2023, the company had cash inflow from operating activities worth $2.5 billion, reflecting an improvement of 19% from the year-ago period. Such solid cash should enable EIX to duly offer attractive returns to its shareholders in terms of robust dividend payouts.
EIX is committed to delivering 5-7% core earnings per share (EPS) growth for 2021-2025. This reinforces the company’s financial prowess through strong earnings and its ability for enhanced dividend disbursements.
In May 2023, SCE filed its 2025 GRC application with the CPUC to authorize SCE's revenue requirement of $10.3 billion, $600 million, $700 million and $700 million in 2025, 2026, 2027 and 2028, respectively. Further, in August 2023, it filed a $2.4 billion cost recovery application for TKM events. These filings, once approved, will boost Edison International’s earnings and enable it to make generous dividend payouts.
Utilities’ Legacy of Dividend Payment
EIX is not the only one in the utility space that has a long dividend payment history. Many other utilities have a track record of increasing dividends. Some of these are:
Atmos Energy ATO: On Nov 8, 2023, Atmos Energy raised its quarterly dividend to 81 cents, marking a 9.5% increase. The company’s new annualized dividend rate is $3.24 per share. ATO payout currently is 48% of earnings.
The current dividend yield of ATO is 2.81%, better than the Zacks S&P 500 composite’s yield of 1.38%. The long-term (three to five years) earnings growth is pegged at 7.3%.
Entergy Corp. ETR: On Oct 27, 2023, Entergy raised its quarterly dividend to $1.13, marking a 5.6% increase. The company’s new annualized dividend rate is $4.52 per share. ETR's payout currently is 63% of earnings.
The current dividend yield of ETR is 4.45%, better than the Zacks S&P 500 composite’s yield of 1.38%. The long-term earnings growth is pegged at 6.4%.
American Electric Power AEP: On Oct 24, 2023, American Electric Power raised its quarterly dividend to 88 cents, marking a 6% increase. The company’s new annualized dividend rate is $3.52 per share. AEP's payout currently is 66% of earnings.
The current dividend yield of AEP is 4.31%, better than the Zacks S&P 500 composite’s yield of 1.38%. The long-term earnings growth is pegged at 4.8%.
Zacks Rank & Price Performance
EIX currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past year, shares of EIX have rallied 7.3% against the industry’s 11.1% decline.
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