Edison International (NYSE: EIX). EIX shares trade at 11.6-times.
In addition, the company is seeing increased revenue from the recovery of its investments in infrastructure projects and alternative energy facilities.
Edison International‘s other strengths include attractive valuation metrics and the retirement of the San Onofre nuclear plant. Moreover, the expected rise in infrastructure improvement costs should have little or no impact on future earnings growth.
RECENT DEVELOPMENTS
Edison International Parent and Other narrowed its loss by $0.03 per share from 3Q19, reflecting the impact of tax benefits. For 3Q20, Edison posted operating revenue of $4.64 billion.
SCE continues to mitigate wildfire risk by strengthening infrastructure, upgrading technology, and improving operational practices.
EARNINGS & GROWTH ANALYSIS
Management projects 2020 EPS of $4.47-$4.62. In addition, we like the company’s positive relationship with regulators and clearer earnings visibility. We also view increased spending on electric transmission and solar projects as a strong plus, as these facilities are more likely to provide higher returns than those earned on distribution and generation assets.
MANAGEMENT & RISKS
Edison International’s management team is made up of seasoned company executives and, in our opinion, well regarded by the investment community.
Mr. Pizarro served as president of SCE from October 2014 through May 2016, when he was named president of Edison International. He became chief executive officer in October 2016. Previously, Mr. Pizarro was president of Edison Mission Energy.
Maria Rigatti is the company’s CFO. Prior to her current role, Ms. Rigatti was SVP and CFO at SCE.
COMPANY DESCRIPTION
Edison International is a generator and distributor of electric power, and an investor in infrastructure and energy assets, including renewable energy. SCE supplies electricity to 5.0 million customers in central and southern California (excluding Los Angeles and San Diego).
VALUATION
Finally, the retirement of the San Onofre nuclear plant in 2018 and the exit from the nonregulated, loss-ridden EME subsidiary are strong pluses, in our opinion. The EME subsidiary had been hurt for seven years by low competitive power prices.
Source: Argus
