Edison International (EIX): A Bull Case Theory

We came across a bullish thesis on Edison International on Value investing subreddit by GreenNomad00. In this article, we will summarize the bulls’ thesis on EIX. Edison International's share was trading at $53.07 as of October 9th. EIX’s trailing and forward P/E were 8.00 and 8.94 respectively according to Yahoo Finance.

Edison International (EIX) is a California-focused electric utility company, with its key subsidiary, Southern California Edison (SCE), serving roughly 50,000 square miles. The company is well positioned to benefit from the growing demand for electrification and clean energy solutions, including AI-driven grid management. EIX’s stock peaked at $87.75 in November 2024 but has since declined to around $52, largely due to wildfire-related concerns.

The company was allegedly linked to a wildfire causing billions in damages, and the key risk revolves around whether EIX is found negligent. If deemed liable but non-negligent, the company would pay approximately $4 billion, with the remainder covered by government funds.

However, a finding of negligence could expose EIX to uncapped liabilities, potentially threatening its financial stability. To date, the company reports no evidence of negligent behavior. Despite these risks, EIX trades at a low valuation relative to its peers, with a price-to-earnings ratio of 8 versus industry averages near 20, and offers an attractive dividend yield of 6.19%. This combination of depressed stock price and strong cash return makes EIX a compelling opportunity for investors who can withstand legal uncertainty.

If the legal matters resolve favorably, the stock could see substantial upside, while the underlying business remains a stable utility with strong regulatory support and long-term growth prospects. Overall, EIX presents a risk-adjusted investment case where patience through the resolution of contingent liabilities could be rewarded with both capital appreciation and consistent income.

Previously we covered a bullish thesis on Evergy, Inc. (EVRG) by Hidden Market Gems in April 2025, which highlighted the company’s defensive nature, local electricity provision, high dividend yield, and resilience during macro uncertainty. The company's stock price has appreciated by 17.67% since our coverage. The thesis still stands as EVRG remains a stable utility. GreenNomad00 shares a similar perspective but emphasizes Edison International’s clean energy focus and wildfire-related legal risks.

Edison International is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held EIX at the end of the second quarter which was 44 in the previous quarter. While we acknowledge the potential of EIX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.