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Key Takeaways:
- Edison International offers a rare combination of a 6.3% dividend yield and a 21-year track record of consecutive dividend growth, making it one of the most compelling income ideas in the utility space today.
- While growth is expected to be steady rather than explosive, analysts believe the stock could deliver 10%+ annual returns over the next few years if earnings stay on track and sentiment improves.
- With the stock trading near multi-year lows and the dividend yield near a decade high, Edison may appeal to long-term investors looking for stable income and valuation-driven upside.
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Edison International isn’t usually the first name that comes to mind when you think of high-yield dividend stocks.
But with its core utility operations serving over 15 million people across Southern California, the company generates reliable earnings in one of the most regulated and essential industries in the U.S.
After a steep stock price drop tied to wildfire concerns and interest rate pressures, Edison’s dividend yield has surged to 6.3%, one of the highest levels seen in years.
With a long history of consistent payouts, stable earnings, and room for dividend growth, Edison may be one of the most overlooked income opportunities in the utility sector.
Analysts Think the Stock is Undervalued Today
Edison International shares currently trade around $51, while a base-case valuation based on analysts’ consensus estimates suggests the stock could be worth $65/share by the end of 2027.
That scenario would imply total returns of 27.4% over 2.5 years, or about 10.3% annually (including dividends), if earnings grow as expected and the stock trades at a slightly higher valuation multiple.
If Edison delivers on the high end of analyst estimates, driven by steady earnings growth and a reversion in valuation, the stock could offer even greater upside.
With a dividend yield above 6% and potential price appreciation ahead, Edison looks like a reliable dividend stock with room to run.
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Edison’s Dividend Yield Has Surged to Multiyear Highs
Edison’s dividend yield has climbed to around 6.3%, one of the highest levels the stock has offered in more than a decade.
That’s well above its 5-year average of 4.5% and far above the low end of its historical range near 3.5%. Buying dividend stocks while they have historically high yields has the potential to lead to solid long-term returns because sometimes the stock price recovers, and you’re still making high dividend yields.
The recent surge in yield is mainly due to a drop in Edison’s stock price, while the company has continued raising its dividend. EIX shares have fallen more than 25% since mid-2023, as investors reacted to concerns around wildfire-related liabilities, rising interest rates, and negative free cash flow tied to major infrastructure spending.
Looking ahead, Edison is taking steps to reduce wildfire risk and improve cash flow through targeted infrastructure investments and rate increases. If these efforts continue as planned, earnings should remain steady, and sentiment is likely to recover over time, especially as interest rate pressures ease.
Edison’s Dividend Looks Safe Despite Utility-Sector Risks
For 2025, Edison is expected to earn $6.06 per share and pay out $3.26 in dividends, resulting in a payout ratio of about 54%.
That’s well below the 70%-80% range common among utilities and leaves room for continued dividend growth. Earnings are projected to rise to $6.48 by 2027, with dividends reaching $3.67 and the payout ratio staying steady.
Most of Edison’s profits come from regulated utility operations in Southern California, which provide reliable income. The company has raised its dividend for 21 consecutive years and maintains a consistent approach to shareholder returns.
While wildfire risks and negative free cash flow have weighed on sentiment, Edison’s strong earnings profile and disciplined payout make the dividend look sustainable going forward.
See Edison International’s full growth forecast and analyst estimates. (It’s free) >>>
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
