Edison May Have Caused Fire, But Ready To Pay Out $920 Million In Profits

Southern California Edison’s shareholders should continue get their dividends paid … for their investments … according to a stock analyst quoted by Barrons magazine yesterday.

This despite the likelihood of having to pay billions in damages for apparently causing the Woolsey Fire.

Edison International is worth 18 billion in stock … with just over 2 billion dollars of that in a preferred class of shares .

Both pay profits to the shareholders in the form of dividends.

Edison’s common stock prices have dropped 22 percent in the wake of the fire …according to the magazine.

But the preferred stock prices have dropped only 10 percent.

Both classes of stock pay dividends … profits of around 10 percent paid to shareholders.

They provide the money that the company needs to invest in its system … and to buy power.

Investors are skittish about the California law that holds utilities legally responsible for fire damage if their equipment causes a fire  … even the utilities did nothing negligent.

Edison International stockholders are in line to get paid about 920 million dollars in company profits this year.

Senior credit strategist Frank Sileo at UBS Bank tells Barrons that Edison International has enough money in the bank … enough insurance … and strong financial flexibility … to fund wildfire-related losses.

He expects no dent in the expected 920 million dollar payout to investors this year.

But don’t forget … Edison is also on the hook for about 2 billion dollars in damages from the gigantic Thomas Fire … earlier this year in Ventura and Santa Barbara counties.

In a statement to Barrons … Edison said:

“… the company’s board of directors makes the decisions about declaring dividends. Each quarter, the board conducts a robust review process to determine if the legal tests are satisfied (as required under California law) before a dividend declaration is made.”