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Why Edison International (EIX) is a Top Dividend Stock for Your Portfolio

Zacks Equity Research
In the latest trading session, Dominion Energy (D) closed at $76.66, marking a +0.78% move from the previous day.

All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.


Edison International in Focus

Based in Rosemead, Edison International (EIX) is in the Utilities sector, and so far this year, shares have seen a price change of 11.89%. Currently paying a dividend of $0.61 per share, the company has a dividend yield of 3.86%. In comparison, the Utility - Electric Power industry's yield is 2.91%, while the S&P 500's yield is 1.96%.

In terms of dividend growth, the company's current annualized dividend of $2.45 is up 0.9% from last year. In the past five-year period, Edison International has increased its dividend 5 times on a year-over-year basis for an average annual increase of 13.29%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Right now, Edison International's payout ratio is 59%, which means it paid out 59% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for EIX for this fiscal year. The Zacks Consensus Estimate for 2019 is $4.53 per share, which represents a year-over-year growth rate of 9.16%.

Bottom Line

Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.

For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, EIX is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).

Edison International (EIX) : Free Stock Analysis Report
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