July 23, 2025 a 07:46 am
EIX: Dividend Analysis - Edison International
Edison International maintains a significant presence in the utilities sector, with a robust dividend yield that attracts income-focused investors. Despite recent challenges that led to a dividend cut in 2024, the company's long-standing 50-year history of dividends demonstrates its commitment to shareholders. Financial stability remains an essential concern, underscored by high leverage and negative free cash flow yields.
📊 Overview
Diving into the specifics, Edison International operates in the essential utilities sector, ensuring a consistent demand for its services. Here's a quick overview of its dividend profile:
| Sector | Dividend yield (%) | Current dividend per share (USD) | Dividend history (years) | Last cut or suspension |
|---|---|---|---|---|
| Utilities | 6.46 | 3.33 | 50 | 2024 |
🗣️ Dividend History
The history of dividend payments is crucial for understanding a company's commitment to returning value to shareholders. Edison International boasts a remarkable 50-year history, though recent cuts were observed, signaling potential financial adjustments.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 2.4825 |
| 2024 | 2.34 |
| 2023 | 2.9925 |
| 2022 | 2.8375 |
| 2021 | 2.6875 |
📈 Dividend Growth
Dividend growth is a pivotal metric for assessing the potential future income stream from a stock investment. Let's explore Edison International's recent growth:
| Time | Growth (%) |
|---|---|
| 3 years | -0.05 |
| 5 years | -0.01 |
The average dividend growth is -1.12% over 5 years. This shows a negative trend, reflecting recent financial constraints.
📉 Payout Ratio
The payout ratio assesses the sustainability of a dividend. Analyzing both EPS and free cash flow payout ratios offers insight into the company’s financial health:
| Key figure | Ratio (%) |
|---|---|
| EPS-based | 43.67 |
| Free cash flow-based | -200.29 |
While the EPS-based payout ratio of 43.67% appears manageable, the negative FCF payout ratio highlights troubling cash flow issues.
✅ Cashflow & Capital Efficiency
Cash flow and capital efficiency are vital for a company's ability to sustain and potentially grow dividends. The following data provides a deeper understanding of these financial metrics:
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | -0.02 | -0.07 | -0.11 |
| Earnings Yield | 0.05 | 0.05 | 0.03 |
| CAPEX to Operating Cash Flow | 1.12 | 1.60 | 1.80 |
| Stock-based Compensation to Revenue | 0 | 0 | 0 |
| Free Cash Flow / Operating Cash Flow Ratio | -0.14 | -0.60 | -0.80 |
These figures illustrate Edison International's challenges in generating positive free cash flow, crucial for dividend sustainability and growth.
⚠️ Balance Sheet & Leverage Analysis
Examining leverage ratios offer insights into the company's debt levels and financial stability. High leverage may pose risks to dividends amidst economic downturns:
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 2.43 | 2.28 | 2.12 |
| Debt-to-Assets | 0.44 | 0.43 | 0.42 |
| Debt-to-Capital | 0.71 | 0.69 | 0.68 |
| Net Debt to EBITDA | 5.90 | 5.98 | 7.21 |
| Current Ratio | 0.96 | 0.79 | 0.68 |
| Quick Ratio | 0.78 | 0.73 | 0.64 |
| Financial Leverage | 5.50 | 5.27 | 4.99 |
Edison's high leverage ratios raise concerns about its financial resilience, particularly in periods of economic uncertainty.
📈 Fundamental Strength & Profitability
Profitability metrics highlight a company's ability to generate profits relative to its resources, crucial for sustaining dividends:
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 0.10 | 0.09 | 0.05 |
| Return on Assets | 0.02 | 0.02 | 0.01 |
| Margins: Net | 0.09 | 0.09 | 0.05 |
| Margins: EBIT | 0.20 | 0.19 | 0.11 |
| Margins: EBITDA | 0.36 | 0.36 | 0.26 |
| Margins: Gross | 0.41 | 0.41 | 0.36 |
| Research & Development to Revenue | 0 | 0 | 0.02 |
Moderate returns and profit margins reflect operational efficiencies, acting as cornerstones for dividend payments.
📉 Price Development
🔍 Dividend Scoring System
| Criterion | Score (1-5) | Score Bar |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 2 | |
| Dividend growth | 1 | |
| Payout ratio | 2 | |
| Financial stability | 3 | |
| Dividend continuity | 3 | |
| Cashflow Coverage | 1 | |
| Balance Sheet Quality | 2 |
Total Score: 18/40
⚖️ Rating
Edison International presents a mixed dividend picture, with an attractive yield but concerns surrounding stability and growth. The unsustainable payout ratios and high leverage add risks. Investors should cautiously weigh these factors against the company's fundamental strengths before deciding.