Edison InternationalEIX

Morningstar Rating

Stock Research and Analysis

by Travis Miller

With an almost-even split between regulated and unregulated utility profits, Edison International investors must keep one eye on Southern California demographics and one eye on Midwest power prices. Before the collapse in energy prices in July 2008, Read more

Bulls Say

With $17 billion in planned investment between 2010 and 2012, Edison's regulated utility could increase earnings 8% annually.

To have access to renewable power generation in Southern California, Edison plans to invest $6 billion in transmission lines, all of which could earn 12% returns on equity.

Macro conditions, such as tight supply, limited transmission, and increasing reliance on renewable energy, should bolster investment opportunities for many years.

Carbon legislation working through Congress could ease customer rate increases in California. Read more

Bears Say

Costly environmental controls that Edison must install on its Illinois coal facilities by 2012 could lead it to shut down plants.

Rising coal costs and pending environmental legislation could cut into Edison's merchant power-generation profits.

Edison's $1.26 dividend per share yields 3.5% at our fair value estimate, in line with the utilities sector average. Read more

Strategy

Edison's primary goal is to build as many new power plants, transmission lines, and distribution systems as possible in Southern California at attractive regulated rates. In particular, it must expand Read more

Management

CEO Theodore F. Craver, 56, the former CFO of Edison International and president and CEO of Edison Mission Group, succeeded industry and company veteran John Bryson in mid-2008. Bryson retired after a 24-year career at Edison and a 30-year career in Read more

Profile

Edison International is the parent company of Southern California Edison, an electric utility that supplies power to 13 million residents in a 50,000-square-mile area of Read more

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