Travis Miller: Most U.S. utilities these days are in good financial health with good dividend growth prospects and well-covered dividends. We're going to highlight three that we think are particularly good for income investors.
We think Edison International offers investors both upside to our $66 per share fair value estimate, 4.5% yield, and also 6% dividend growth. It's been caught up in some of the wildfire concerns in California, but we don't think that risk is nearly at the level of its northern neighbor PG&E, which pays no dividend.
The second name we like is Dominion Energy. It's been growing its dividend upward at 9%. We don't think that it'll grow that fast in the future, but it is our only wide-moat stock and we do think it has significant upside on the stock price.
The third, Sempra Energy, also another California utility caught up in some of the California wildfire concerns. But in this case, California is only half of its business. We think it's going to invest upward of $5 billion a year. Even though it trades at a 3% dividend yield, we think it can grow 9% for the next few years and possibly even as much as 11% in 2021 and beyond.