On Apr 19, 2013, shares of
) hit a new 52-week high of $52.48. Though the company had
experienced negative earnings surprises in all the other three
quarters of 2012, positive earnings surprise of 66.0% in the last
quarter resulted in an average beat of 4.05%.
Infrastructure improvement programs, strong portfolio of
regulated utility assets, effective cash deployment strategy and
the favorable resolution of the pending General Rate Case have
helped the company to achieve this new high.
Currently, Edison International has an inventory turnover of
16.13 times in the trailing twelve months compared to 13.07 times
for the Zacks industry average which represents a strong sign of
operational efficiency. In addition, the company's operational
effectiveness is evident in its industry-high Return on
Investment of 4.5% and current ratio of 0.71.
Edison International continues to be a strong cash generator with
its operating cash flow reaching approximately $3.3 billion in
2012. Cash and cash equivalents at the end of 2012 were $170
million compared to $169 million in 2011. Also, the company
follows an effective cash deployment strategy via dividend
payments. In Dec 2012, the company increased its annual dividend
from $1.30 to $1.35 per share. With the current adjusted
closing price of $52.47, the company generates a dividend yield
The company is focused on implementing infrastructure improvement
programs with California's renewable energy mandate through
programs like SmartConnect and Solar Photovoltaic Program. Going
forward, Californian economic fundamentals would allow the
utility to grow to stronger levels with the improvement of the
Recently, a subsidiary of Edison International, Southern
California Edison announced that it will invest more than $2.2
million to upgrade a distribution circuit that serves portions of
the city of Rancho Palos Verdes. It will replace approximately
150 poles, 57 transformers and 2.75 miles of overhead power lines
in order to improve system reliability and smart grid technology.
With its strong portfolio of regulated utility assets and
well-managed merchant energy operations, Edison International
presents a lower risk profile compared to its utility-only peers.
With the management targeting to pay 45% - 55% of Southern
California Edison's earnings as dividend we see ample scope for
dividend appreciation going forward.
Edison International presently retains a short-term Zacks Rank
#2 (Buy). Other stocks worth considering are
Brookfield Infrastructure Partners L.P.
Empresa Nacional de Electricidad S.A.
Pike Electric Corporation
), all with a Zacks Rank #1 (Strong Buy).
BROOKFIELD INFR (BIP): Free Stock Analysis
EDISON INTL (EIX): Free Stock Analysis Report
ENDESA-CHILE (EOC): Free Stock Analysis
PIKE ELECTRIC (PIKE): Free Stock Analysis
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