Edison International (NYSE:EIX) gives income investors access to a regulated electric utility via Southern California Edison, which provides service to about 15 million people in Southern, Central, and Coastal California. The company’s regulated activities produce earnings that are fairly predictable, and its investments in grid reliability, wildfire prevention, and electrification contribute to long-term growth.
Revenue has been increasing steadily, going from $16.34 billion in 2023 to $17.60 billion in 2024 and then to $19.32 billion in 2025. However, merely having higher revenue does not mean that the dividend is strong since regulatory decisions, financing costs, and liabilities related to wildfires can affect how much of that revenue turns into sustainable earnings and cash that is available to shareholders. Even then, the company is among the best blue-chip stocks trading under $100.
Earnings Are Improving, but Reported Profit Needs Context
In the second quarter of 2026, Edison International achieved a net income of $534 million, which is equivalent to $1.39 per share, as compared to $343 million or $0.89 per share in the same period the previous year. Core earnings rose to $592 million, or $1.54 per share, from $374 million, or $0.97 per share. The company has once again confirmed its guidance for 2026 core earnings per share of $5.90 to $6.20 and its target of annual core earnings per share growth of 5% to 7% through 2030. It is important to distinguish between reported and core earnings.
Although Edison’s GAAP EPS for 2025 was $11.58, its core EPS was only $6.55; the difference was mainly due to non-core items, such as developments connected with wildfires. Investors should thus assess the dividend in relation to recurring earnings rather than suppose that the exceptionally high reported profit shows what its normal earning power is.
Also read: 10 High Yield Stocks For Lasting Retirement Income
Forward P/E: A Discount With a Reason
Edison is trading at a forward P/E of 8.22x and a trailing P/E of 5.52x, which amounts to a forward earnings yield of approximately 12.2%. The forward multiple is considerably lower than that of Duke Energy’s at 15.95x and Southern Company’s at 16.98x, but this discount should not be seen as indicating a simple bargain since Edison has wildfire exposure and capital requirements which present risks that investors do not encounter to the same extent at every other regulated utility.
The trailing and forward P/E ratios also differ significantly. The trailing figure is based on earnings which have been affected by major non-core items, whereas the forward estimates are based on a more normalized earnings base. Based on management’s 2026 core EPS guidance, the P/E ratio would be about 9.1x at a share price of $55, corresponding to an earnings yield of around 11%. The normalized figure is more useful than depending on the unusually low trailing multiple.
Caution is also needed when drawing historical comparisons: in 2023 the company’s core EPS was $4.76, $4.93 in 2024 and $6.55 in 2025; the increase in 2025 was in part due to regulatory and interest-expense benefits, and therefore investors should not suppose that the whole of the increase is indicative of a sustained growth rate. The stock’s earnings yield is nearly seven percentage points higher than the 10-year U.S. Treasury yield of about 5.28%, with the spread compensating for the risk of equities. Although it does not guarantee a return, the principal and interest payments on Treasuries are defined by contract, while Edison’s earnings and share price are subject to regulatory decisions, financing costs, and wildfire liabilities.
Dividend Sustainability and Total Returns
Edison offers a quarterly dividend of $0.8775 per share, which amounts to $3.51 per year at the present rate. With the share price at about $55, the yield works out at around 6.4%. The company has a strong dividend growth record. It is among the best high-yield stocks on our list. The #1 stock on the list trades at a P/E multiple of 15.2x and has surged by over 40% in the past year. Read more here.
Based on core EPS of $6.55 in 2025, the annual dividend works out to a payout ratio of about 54%. This figure falls within the management team’s target range of 45% to 55% for Southern California Edison’s core earnings. While the ratio indicates that the dividend is supported by normalized earnings, it must be noted that earnings coverage does not ensure equivalent free-cash-flow coverage.
The main worry is the expense involved in keeping and updating the grid, together with the issue of wildfire exposure. Since large amounts of money will have to be spent, this could lead to a greater need to borrow, and higher interest rates might limit financial flexibility. Furthermore, unfavorable court decisions or regulatory results could have a negative effect on earnings and on the growth of dividends.
The dividend contributes a significant amount to total returns, while the management’s aim of achieving core EPS growth between 5% and 7% could provide a basis for future dividend payments and an increase in the share price. However, neither growth nor capital gains can be guaranteed, especially if the market continues to require a higher risk premium.
Conclusion
Edison International’s dividend provides an attractive income source, supported by its regulated businesses and a payout ratio generally in line with management’s targets. The company’s low forward P/E and high earnings yield indicate potential for significant appreciation in valuation, but the discount is due to real wildfire, financing, and execution risks. The dividend appears to be sustainable given the current earnings guidance; nevertheless, the investment case will come down to whether or not Edison can achieve ongoing earnings growth without letting those risks reduce returns to shareholders.
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This article is originally published at Insider Monkey.
