On Mar 14, we retained our Outperform recommendation on
) following its fourth-quarter results, where reported numbers
comfortably beat the Zacks Consensus Estimates. This diversified
utility presently carries a Zacks Rank #2 (Buy).
Why the Reiteration?
Edison International's fourth-quarter 2012 adjusted earnings of
$1.76 per share beat both the Zacks Consensus Estimate of $1.06
and year-ago quarterly earnings of 75 cents per share.
Following the release of the fourth-quarter results, the Zacks
Consensus Estimate for 2013 has gone up 7.3% to $3.51 per share
as 4 of 7 estimates moved north. Moreover, the Zacks Consensus
Estimate for 2014 has also increased 4.7% to $3.59 per share as 4
of 11 estimates were raised.
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 a forward-looking regulatory backup allowing the utility to
file its General Rate Cases for three years, Southern California
Edison has witnessed a sharp rise in its regulated rate base in
recent times. Over the past five years, the regulators allowed
rate base of the utility to grow by a CAGR of approximately 11%.
In Dec 2012, the company raised its annual dividend from $1.30
per share to $1.35 per share. This comes to a very competitive
dividend yield of approximately 2.87%. Going forward, with the
management targeting to dish out 45% 55% of Southern California
Edison's earnings as dividend, we see ample scope for dividend
Edison Mission Group's future growth will come from improved
performance in unregulated power generation and energy trading,
higher price realizations, upcoming wind projects and a strong
balance sheet with no significant near-term maturities.
Other Stocks to Consider
Other stocks to consider are
Pike Electric Corporation
Brookfield Infrastructure Partners L.P.
Otter Tail Corporation
) , all carrying a Zacks Rank #1 (Strong Buy).
BROOKFIELD INFR (BIP): Free Stock Analysis
EDISON INTL (EIX): Free Stock Analysis Report
OTTER TAIL CORP (OTTR): Free Stock Analysis
PIKE ELECTRIC (PIKE): Free Stock Analysis
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