Strong Buy on Edison International - Analyst Blog
On Mar 26, we have upgraded electric utility
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Edison International reported strong results in the fourth quarter 2012 with earnings and revenue comfortably surpassing the Zacks Consensus Estimates. The bottom line benefited from strong performance at Southern California Edison (SCE). The implementation of the 2012 General Rate Case at SCE drove its earnings.
Edison International with its balanced portfolio of regulated utility assets and well-managed merchant energy operations is well placed in the utility sector. The company is also implementing infrastructure improvement programs, focusing primarily on system reliability, smart grid technology and compliance with California's renewable energy mandate through programs like SmartConnect and Solar Photovoltaic Program (SPVP).
With the uncertainty related to the rate case behind the company, Edison International has plans to forge ahead in 2013 and 2014 with substantial capital investments. We appreciate the initiatives undertaken by the company to improve and add to its renewable portfolio.
Edison International has a strong balance sheet with ia debt-to-capitalization of 45.2% at the end of 2012. A strong cash generator, Edison had a cash balance of $170 million at 2012 end with cash flow from operating activities reaching $3.3 billion during the year.
Edison International 's premier position in the utility space is upheld by the company's solid 2013 guidance. Edison International forecast full year 2013 earnings per share in the range of $3.45-$3.65.
Over the long term, the earnings growth rate is pegged at 5.85%. The last 60 days saw the Zacks Consensus Estimates for 2013 and 2014 rise a respective 7.3% and 6.1% to $3.51 and $3.64.
Other Stocks to Consider
Other than Edison International , a few other utilities are also performing well and have a favorable Zacks Rank. The stocks worth considering are Brookfield Infrastructure Partners L.P. ( BIP ), Huaneng Power International, Inc. ( HNP ) and Otter Tail Corporation ( OTTR ). All of them presently have a Zacks Rank #1 (Strong Buy).
BROOKFIELD INFR (BIP): Free Stock Analysis Report
EDISON INTL (EIX): Free Stock Analysis Report
HUANENG POWER (HNP): Free Stock Analysis Report
OTTER TAIL CORP (OTTR): Free Stock Analysis Report
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