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SAN FRANCISCO – Neale McFarland never expected to get rich by owning stock in California’s two largest utilities, but he knew he could always count on a decent-sized dividend check to cushion his retirement income. 

It all changed in a few mind-boggling weeks marked by almost daily bankruptcy threats from PG&E Corp. and Edison International that turned two of the nation’s steadiest stocks into risky gambles. 

The financial duress caused by California’s power crisis wiped out quarterly dividends that had been regularly paid to the utility’s shareholders through both World Wars, the Depression and the oil shocks of the 1970s. 

Edison, the owner of Southern California Edison, had paid dividends every quarter since 1910. PG&E, the holding company of Pacific Gas and Electric, hadn’t missed a dividend since 1916. 

“It’s hard to believe that big companies that you depend on for years can all of a sudden get messed up something awful,” said McFarland, 81. 

The abrupt financial descent of the two once-stable utility stocks is eroding the retirement incomes of thousands of retirees. 

“These are real ma and pa stocks,” said Sunnyvale bankruptcy attorney Wayne Silver, who has fielded frantic calls from retirees amid PG&E’s dire financial warnings and the suspension of its dividend. 

McFarland, a San Carlos resident, decided to pull the plug on his utility investments after hearing the bad news about the dividends, which had given him $3,600 annually. 

Earlier this month, he sold his remaining holdings in Edison and PG&E — 1,500 shares in all — and swallowed a $15,500 loss in the process. 

That might not sound like much in a high-rolling era when high-tech investors lose thousands — or even millions — in a few minutes. 

But the downfall of San Francisco-based PG&E and Rosemead-based Edison has been traumatic for retirees who thought utility stocks were as reliable as their Social Security checks. 

“I would never have thought something like this could happen,” said Donald Zwicky of Walnut Creek, a PG&E shareholder for more than 30 years. 

Zwicky, 72, plans to hold his PG&E shares for two more months in hopes the stock will recover and the dividend is restored. If that doesn’t happen, he plans to sell his entire stock portfolio, which also includes holdings in four other utilities around the country. 

“If something like this can happen to these utilities here, then it can happen to any company. I am done with the stock market. I just can’t take it anymore,” Zwicky said. 

Utilities have been investment magnets for retirees for decades because their dividends frequently yield a higher return than most bank accounts. 

Together, Edison and PG&E in a normal year would distribute dividends of about $840 million to nearly 400,000 shareholders. 

But they eliminated their dividends after rapidly running up more than $11 billion in debt paying more for electricity than they are permitted to charge customers under California’s market deregulation. If they go bankrupt, their shareholders’ investments could become worthless. 

Both companies have been swamped with phone calls from retirees. 

“Many of them are quite shocked and quite concerned about what has happened to their savings,” Edison spokesman Kevin Kelley said. 

The paper losses have already been huge. 

PG&E’s stock began the 1990s trading at $22.50 and ended the decade at $20, a 7 percent decline. Edison’s stock gained $6.50, or 33 percent, during the 1990s, climbing from $19.69 a share to $26.19. Over the same decade, the Standard & Poor’s 500 stock index soared by 316 percent. 

On Friday, PG&E’s stock finished the week at $12.50, a 54 percent decline in less than two months. The shares have traded as low as $8.38 this month. 

Edison ended the week at $12.19, a 45 percent decline since Nov. 30. Its shares have traded as low as $6.25 this month. 

Some shareholders are taking the slide in stride, figuring California’s government won’t let the utilities go bankrupt and possibly jeopardize the state’s economic health. 

“These aren’t a bunch of dummies. Somehow, it is all going to work out,” said Bob Wicker, 90, a shareholder in both PG&E and Edison. 

Wicker, of Walnut Creek, would lose $12,000 in annual income if the dividends aren’t restored. He said he can afford it because other stocks that he owns continue to pay dividends. 

Former PG&E employee Dolores Goltra, 73, accumulated 2,000 shares of the company’s stock before retiring 11 years ago. She stands to lose $2,400 in dividend income. 

“I think the stock will bounce back eventually,” she said. “I just hope I live long enough to see it.”