| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 77.72 | 53 |
| Intrinsic value (DCF) | 0.00 | -100 |
| Graham-Dodd Method | 10.38 | -80 |
| Graham Formula | 62.45 | 23 |
Edison International (NYSE: EIX) is a leading electric utility holding company serving over 15 million customers across Southern, Central, and Coastal California through its subsidiaries, primarily Southern California Edison (SCE). Founded in 1886 and headquartered in Rosemead, California, Edison International operates in the regulated electric utility sector, providing essential power generation, transmission, and distribution services. The company's infrastructure includes a vast network of 39,000 circuit-miles of overhead lines, 31,000 circuit-miles of underground lines, and 800 substations, ensuring reliable electricity delivery. Edison International also offers tailored energy solutions for commercial and industrial users, positioning itself as a key player in California's transition to renewable energy. With a market capitalization of approximately $21.8 billion, the company plays a critical role in supporting California's ambitious clean energy goals while maintaining stable returns for investors through its regulated operations and consistent dividend payouts.
Edison International presents a stable investment opportunity within the defensive utilities sector, supported by its regulated revenue model and essential service offerings. The company benefits from a predictable cash flow stream, evidenced by its $5.0 billion in operating cash flow and $3.22 annual dividend per share. However, investors should note the high total debt load of $37.8 billion, which could pose refinancing risks in a rising interest rate environment. The company's beta of 0.77 indicates lower volatility compared to the broader market, making it attractive for risk-averse investors. Edison's strategic positioning in California—a state aggressively pursuing renewable energy—provides growth opportunities but also exposes the company to regulatory and wildfire-related risks. The current valuation appears reasonable given the sector's typical multiples, with potential upside from infrastructure investments and rate base growth.
Edison International's competitive advantage stems from its monopoly-like position as one of California's largest regulated electric utilities, operating in a high-barrier-to-entry industry with guaranteed returns on capital investments. The company's scale and integrated infrastructure (generation, transmission, and distribution) create significant economies of scale that smaller competitors cannot match. Its subsidiary SCE is the primary electricity provider for much of Southern California, giving it pricing power through regulated rate structures. However, the company faces increasing competition from community choice aggregation (CCA) programs in California, which allow municipalities to procure power independently while still using Edison's distribution network. This trend could pressure long-term growth. Edison differentiates itself through its early investments in grid modernization and renewable energy integration, positioning it as a leader in California's energy transition. The company's main challenges include managing wildfire mitigation costs (a growing concern for all California utilities) and navigating complex regulatory environments that could impact profitability. Its financial strength (evidenced by $193 million in cash and substantial operating cash flows) provides resilience compared to smaller regional players.