) wholly owned subsidiary Southern California Edison ("SCE")
announced that it intends to redeem all of the outstanding shares
of its Series B and Series C Preference Stock. The redemption
date will be Feb 28, 2013, and the redemption price will be $100
per share of Series B and C Preference Stock plus accrued and
unpaid dividends up to, but excluding the redemption date.
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Earlier, Edison International, in the first nine months of 2012,
generated $2.16 billion from operating activities compared with
$2.82 billion generated in the year-ago period. Cash and cash
equivalents at the end of the reported period were $1.08 billion
versus $1.39 billion at the end of the year-ago period. The
strong liquidity position allows the company to engage in the
redemption plan from its own pocket.
Based in Rosemead, CA, Edison International engages in the supply
of electric energy in central, coastal and southern California.
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.
In addition, an incremental dividend adds to the company's appeal
with the Federal Reserve planning to keep benchmark interest
rates low through mid-2013. 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 appreciation
Southern California Edison operates in a supportive regulatory
environment of California. The California regulator has decoupled
earnings from demand volatility and also partial recovery of fuel
and power purchase cost. The company is also implementing
infrastructure improvement programs, focusing mainly on system
reliability, smart grid technology and compliance with
California's renewable energy mandate through programs like
SmartConnect and Solar Photovoltaic Program (SPVP). Going
forward, Californian fundamentals would allow the utility to grow
to stronger levels with the improvement in the economic
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%.
Overall, the company plans capital expenditure in the range of
$11.8 billion to $13.2 billion for 2012 through 2014 to boost
annualized growth in its rate base by 7% - 9%.
Currently, it holds a short-term Zacks Rank #3 (Hold), primarily
due to the high-level of current valuation of Edison
International. Year to date, the stock rose almost 4.5% and is
now trading near its 52-week high. Utilities that currently look
Integrys Energy Group, Inc.
Pike Electric Corporation
). All are Zacks Rank #1 (Strong Buy) stocks.