This Dividend Stock Is Down 30%… Will It Rebound?
The stock market is at all-time highs.
The gains are largely driven by tech and AI hype.
But dividend stocks aren’t too far behind.
The Vanguard Dividend Appreciation ETF (ticker: VIG) and Vanguard High Dividend Yield Index ETF (ticker: VYM) are two of the most popular dividend ETFs with investors.
And both are near their all-time highs.
Unfortunately, not all dividend stocks are performing well.
One utility, Edison International (ticker: EIX), is down almost 30% in 2025.
Something really bad must have happened for a utility stock to fall 30%… and it did.
In January, massive wildfires spread throughout southern California causing billions of dollars in damages.
There were concerns Edison’s equipment started the wildfires, and the stock crashed.
Since Edison crashed in January, the stock price has hovered around $55 for the last eight months.
Why even talk about Edison? It seems the risk here is way too high.
Well, Edison has a dividend yield close to 6%, which is one of the highest in the entire utilities industry.
Is now the perfect time to own some shares of Edison?
Or is Edison a great example of a yield trap?
Let’s break it down.
Despite its recent legal challenges, Edison not only continues to pay its dividend, but it actually increased its payment in early 2025 by 6%.
Edison has increased its dividend for 23 consecutive years and has no plans to stop.
Management expects earnings and its dividend to grow 6% each year until 2028.
And Wall Street loves Edison!
Analysts think the stock is incredibly undervalued and think it’s worth around $65, which is 15% higher than the current price.
Plus, the financials look excellent.
Edison has some of the highest margins in the entire utilities industry. Its net margin of 16% is double the industry average.
And a price-to-earnings ratio of only 8.25x makes it one of the cheapest utility companies.
What about the wildfires?
California is looking to pass a law increasing the Wildfire Fund by $18 billion.
The Wildfire Fund is used to compensate people and businesses for losses caused by wildfires.
The increased funding will come from higher rates for customers as well as funding from utility companies like Edison.
It sounds bad, but the law will limit the damages paid by utility companies if their equipment causes a damaging wildfire.
Here’s a link with more information about the proposed law.
The Department of Justice also recently announced a lawsuit for damages from Edison for the wildfires.
But they’re asking for $77 million, which is nothing compared to the $1.5 billion in profit Edison made in 2024.
The risks are there.
But the dividend yield, dividend growth, and amazing price-to-earnings ratio is too good to pass up.
Of course, do your own research. But Edison is an excellent deal for dividend investors.
What are some of your favorite utility stocks?
Michael Jennings, Editor
Dividend Stocks Research
Category: Dividend Stocks To Buy?, Dividend Yield
