Edison International: A Dividend Aristocrat in the Making

Edison International (EIX), a California-based public utility company, is on the cusp of becoming a dividend aristocrat, a status reserved for companies that have increased their dividends for at least 25 consecutive years. With a 20-year streak of consistent dividend growth, EIX is well-positioned to join the elite ranks of dividend aristocrats in the near future. The company's commitment to delivering 5% to 7% core EPS growth for 2021-2025 and 2025-2028, coupled with its growing energy demand and strong operational resilience, makes it an attractive investment for dividend-focused investors seeking long-term growth and income.



Edison International's dividend growth has been driven by its strong business performance and regulatory environment. The company reported revenue of $5.2 billion in the third quarter of 2024, up 10.6% from the same period last year, demonstrating its ability to navigate significant climate challenges and position itself well for future growth. ClearBridge Investments highlighted EIX's strong business in its Q3 2024 investor letter, noting its tentative deal to recoup $1.7 billion of wildfire and mudslide expenses in California, bolstering its balance sheet and increasing earnings. Additionally, EIX's operating cash flow for the first nine months of the year came in at $3.8 billion, compared with $2.5 billion in the prior-year period, reflecting the company's strong cash position and growth prospects.



On September 24, 2024, Edison International declared a quarterly dividend of $0.78 per share, in line with its previous dividend, marking the 20th consecutive year of dividend growth. The company's dividend yield is 3.53%, as of December 2, 2024, which is attractive for income-oriented investors. Furthermore, EIX's consistent dividend growth and strong financial performance make it a potential dividend aristocrat in the future.



Analysts have a positive outlook on Edison International, with an average rating of overweight and a mean price target of $90.09. However, Morgan Stanley recently cut its price target on EIX to $72 from $74, maintaining an underweight rating. Despite this, the company's strong business fundamentals and dividend growth prospects make it an appealing investment opportunity for dividend-focused investors.

In conclusion, Edison International's 20-year streak of consistent dividend growth, strong business performance, and solid cash position make it an attractive investment opportunity for dividend-focused investors. As the company continues to deliver on its dividend growth commitment, it is well-positioned to become a dividend aristocrat in the near future. Investors seeking a stable and growing income stream, coupled with long-term growth potential, may want to consider adding Edison International to their portfolios.