Edison Ups Quarterly Dividend - Analyst Blog

Electric utility, Edison International (EIX) boosted its quarterly dividend to 32 cents per share. The company will now pay an annual dividend of $1.28 per share compared to $1.26 previously. This move lifts the company's dividend 1.6% over last year's dividend.

Edison International said that the dividend will be paid on January 31, 2011 to share holders of record as of December 31, 2010.

The board of directors of Edison said the modest increase in the dividend balances the substantial and growing capital needs at its utility business, Southern California Edison (SCE). Going forward, the company plans to pay out roughly 45%-55% of SCE's earnings as dividend to its shareholders.

Nonetheless, management expects to fall short of the targeted payout range due to the projected capital spending program at SCE.

Edison's annualized dividend yield of 3.37% is higher than its peers, Sempra Energy (SRE) and Enersis S.A. (ENI), with respective dividend yields of 3.04% and 1.81%.

Edison has a history of consistently increasing dividends for its shareholders. The company has consistently increased dividend payout from 85 cents in 2004 to $1.28 this year. This illustrates the company's commitment to provide returns to shareholders, enhancing shareholder value.

We note that Edison's strong balance sheet and cash flow position support its strategy of raising dividends. The company ended the September quarter with cash and cash equivalents of $2 billion and operating cash flow $2.8 billion at the end of the nine month period.

Edison International's adjusted earnings in third-quarter 2010 were $1.46 versus $1.09 in the comparable year-ago period.

Edison International expects adjusted earnings in the range of $3.45–$3.60 per share in fiscal 2010, based on strong year-to-date performance. The Zacks Consensus Estimates for fourth quarter 2010, fiscal year 2010 and fiscal year 2011 are 63 cents per share, $3.50 per share and $3.00 per share, respectively.

Based in Rosemead, California, Edison International engages in the supply of electric energy in central, coastal and southern California. The company's principal subsidiaries include Southern California Edison Company, Edison Mission Energy and Edison Capital.

We maintain our long-tern Neutral rating on Edison International. The company currently has a Zacks #3 Rank (short-term Hold rating).

 
EDISON INTL (EIX): Free Stock Analysis Report
 
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