In This Article:
Assessing the Sustainability of Edison International's Upcoming Dividend
Edison International (NYSE:EIX) recently announced a dividend of $0.78 per share, payable on 2024-01-31, with the ex-dividend date set for 2023-12-28. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Edison International's dividend performance and assess its sustainability.
What Does Edison International Do?
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Edison International is the parent company of Southern California Edison, an electric utility that supplies power to 5 million customers in a 50,000-square-mile area of Southern California, excluding Los Angeles. Edison Energy owns interests in nonutility businesses that deal in energy-related products and services. In 2014, Edison International sold its wholesale generation subsidiary Edison Mission Energy out of bankruptcy to NRG Energy.
A Glimpse at Edison International's Dividend History
Edison International has maintained a consistent dividend payment record since 2004. Dividends are currently distributed on a quarterly basis. Edison International has increased its dividend each year since 2003. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 20 years.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Edison International's Dividend Yield and Growth
As of today, Edison International currently has a 12-month trailing dividend yield of 4.16% and a 12-month forward dividend yield of 4.40%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Edison International's annual dividend growth rate was 4.70%. Extended to a five-year horizon, this rate decreased to 4.50% per year. And over the past decade, Edison International's annual dividends per share growth rate stands at 8.70%.
Based on Edison International's dividend yield and five-year growth rate, the 5-year yield on cost of Edison International stock as of today is approximately 5.18%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Edison International's dividend payout ratio is 0.92, which may suggest that the company's dividend may not be sustainable.