NYSE:SRE

Stock Analysis Report

Executive Summary

Sempra Energy, together with its subsidiaries, invests in, develops, and operates energy infrastructure, as well as provides electric and gas services in the United States and internationally.

Rewards

PE ratio (18.1x) is below the US market (18.3x)

Earnings are forecast to grow 6.12% per year

Became profitable this year

Pays a high and reliable dividend of 2.4%

Risk Analysis

Interest payments are not well covered by earnings

Large one-off items impacting financial results

Shareholders have been diluted in the past year



Snowflake Analysis

Established dividend payer and slightly overvalued.


Similar Companies

Share Price & News

How has Sempra Energy's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SRE has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.3%

SRE

2.0%

US Integrated Utilities

0.06%

US Market


1 Year Return

37.4%

SRE

20.2%

US Integrated Utilities

19.4%

US Market

Return vs Industry: SRE exceeded the US Integrated Utilities industry which returned 20.2% over the past year.

Return vs Market: SRE exceeded the US Market which returned 19.4% over the past year.


Shareholder returns

SREIndustryMarket
7 Day1.3%2.0%0.06%
30 Day2.3%4.1%1.1%
90 Day9.6%9.0%8.9%
1 Year41.3%37.4%24.3%20.2%21.9%19.4%
3 Year64.3%50.2%50.1%35.1%48.9%39.3%
5 Year71.5%48.1%78.1%43.0%71.9%53.1%

Price Volatility Vs. Market

How volatile is Sempra Energy's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Sempra Energy undervalued compared to its fair value and its price relative to the market?

18.14x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SRE ($160.89) is trading above our estimate of fair value ($104.51)

Significantly Below Fair Value: SRE is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SRE is good value based on its PE Ratio (18.1x) compared to the Integrated Utilities industry average (21.8x).

PE vs Market: SRE is good value based on its PE Ratio (18.1x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: SRE is poor value based on its PEG Ratio (3x)


Price to Book Ratio

PB vs Industry: SRE is overvalued based on its PB Ratio (2.8x) compared to the US Integrated Utilities industry average (2.3x).


Next Steps

Future Growth

How is Sempra Energy forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

6.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SRE's forecast earnings growth (6.1% per year) is above the savings rate (1.7%).

Earnings vs Market: SRE's earnings (6.1% per year) are forecast to grow slower than the US market (14.2% per year).

High Growth Earnings: SRE's earnings are forecast to grow, but not significantly.

Revenue vs Market: SRE's revenue (3.9% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: SRE's revenue (3.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SRE's Return on Equity is forecast to be low in 3 years time (11.8%).


Next Steps

Past Performance

How has Sempra Energy performed over the past 5 years?

-4.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SRE has a large one-off gain of $704.0M impacting its September 30 2019 financial results.

Growing Profit Margin: SRE became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: SRE's earnings have declined by -4.4% per year over the past 5 years.

Accelerating Growth: SRE has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: SRE has become profitable in the last year, making it difficult to compare its past year earnings growth to the Integrated Utilities industry (3.5%).


Return on Equity

High ROE: SRE's Return on Equity (13%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Sempra Energy's financial position?


Financial Position Analysis

Short Term Liabilities: SRE's short term assets ($3.7B) do not cover its short term liabilities ($9.5B).

Long Term Liabilities: SRE's short term assets ($3.7B) do not cover its long term liabilities ($34.5B).


Debt to Equity History and Analysis

Debt Level: SRE's debt to equity ratio (122.3%) is considered high.

Reducing Debt: SRE's debt to equity ratio has increased from 114.7% to 122.3% over the past 5 years.

Debt Coverage: SRE's debt is not well covered by operating cash flow (11.6%).

Interest Coverage: SRE's interest payments on its debt are not well covered by EBIT (2.8x coverage).


Balance Sheet

Inventory Level: SRE has a high level of physical assets or inventory.

Debt Coverage by Assets: SRE's debt is not covered by short term assets (assets are 0.1x debt).


Next Steps

Dividend

What is Sempra Energy's current dividend yield, its reliability and sustainability?

2.40%

Current Dividend Yield


Dividend Yield vs Market

company2.4%marketbottom25%1.4%markettop25%3.7%industryaverage3.1%forecastin3Years2.8%

Current dividend yield vs market & industry

Notable Dividend: SRE's dividend (2.4%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: SRE's dividend (2.4%) is low compared to the top 25% of dividend payers in the US market (3.7%).


Stability and Growth of Payments

Stable Dividend: SRE's dividends per share have been stable in the past 10 years.

Growing Dividend: SRE's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (42.8%), SRE's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SRE's dividends in 3 years are forecast to be covered by earnings (58.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure


CEO

Jeff Martin (57yo)

1.8yrs

Tenure

US$9,324,491

Compensation

Mr. Jeffrey Walker Martin, also known as Jeff, has been the Chief Executive Officer and Director of Sempra Energy from May 1, 2018 and chairman since December 01, 2018. Mr. Martin served as the Chairman of ...


CEO Compensation Analysis

Compensation vs Market: Jeff's total compensation ($USD9.32M) is about average for companies of similar size in the US market ($USD10.78M).

Compensation vs Earnings: Jeff's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Jeffrey Martin
Chairman & CEO1.8yrsUS$9.32m0.012% $5.2m
Trevor Mihalik
CFO & Executive VP1.8yrsUS$3.78m0.0086% $3.9m
Dennis Arriola
Executive VP & Group President0yrsUS$3.25m0.016% $7.3m
George Bilicic
President0.08yrsno data0.012% $5.4m
Peter Wall
VP, Controller & Chief Accounting Officer1.8yrsno data0.00080% $363.0k
Faisel Khan
Senior Vice President of Finance & Investor Relations1.8yrsno datano data
Lisa M. Alexander
Vice President of Corporate Communications & Sustainability1.8yrsno datano data
Sandeep Mor
Vice President of Corporate Development & Strategy0.4yrsno datano data
Randall Clark
Senior VP0.8yrsno datano data
Erbin Keith
Deputy General Counsel0yrsno datano data

1.8yrs

Average Tenure

54yo

Average Age

Experienced Management: SRE's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Jeffrey Martin
Chairman & CEO1.8yrsUS$9.32m0.012% $5.2m
Kevin Sagara
Chairman & CEO of San Diego Gas & Electric Company0yrsno datano data
J. Lane
Executive Chairman & CEO of Southern California Gas Company0yrsno datano data
William Rusnack
Lead Independent Director0yrsUS$375.08kno data
Alan Boeckmann
Independent Director9yrsUS$265.00k0.0021% $966.5k
Lynn Schenk
Independent Director11.9yrsUS$290.00k0.0040% $1.8m
William Jones
Director22.1yrsUS$291.44k0.0014% $653.4k
James Yardley
Independent Director6.8yrsUS$280.00kno data
Kathleen Brown
Independent Director6.7yrsUS$265.00kno data
Jack Taylor
Independent Director7yrsUS$307.80k0.000050% $22.7k

7.0yrs

Average Tenure

67yo

Average Age

Experienced Board: SRE's board of directors are considered experienced (7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: SRE insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.9%.


Top Shareholders

Company Information

Sempra Energy's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Sempra Energy
  • Ticker: SRE
  • Exchange: NYSE
  • Founded: 1998
  • Industry: Multi-Utilities
  • Sector: Utilities
  • Market Cap: US$45.374b
  • Shares outstanding: 281.90m
  • Website: https://www.sempra.com

Number of Employees


Location

  • Sempra Energy
  • 488 8th Avenue
  • San Diego
  • California
  • 92101
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SRENYSE (New York Stock Exchange)YesCommon SharesUSUSDJun 1998
SE4DB (Deutsche Boerse AG)YesCommon SharesDEEURJun 1998
SRE *BMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNJun 1998
0L5ALSE (London Stock Exchange)YesCommon SharesGBUSDJun 1998
SE4ETLX (Eurotlx)YesCommon SharesITEURJun 1998
SRE.PRANYSE (New York Stock Exchange)6% PFD CONV AUSUSDJan 2018
SRE.PRBNYSE (New York Stock Exchange)6.75% CNV PFD BUSUSDJul 2018
S1RE34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 4 REPR 1 COMBRBRLJan 2020

Biography

Sempra Energy, together with its subsidiaries, invests in, develops, and operates energy infrastructure, as well as provides electric and gas services in the United States and internationally. The company’s San Diego Gas & Electric Company segment generates, transmits, and distributes electricity; and supplies natural gas. It provides electric services to a population of approximately 3.7 million and natural gas services to approximately 3.4 million of that population, covering a 4,100 square mile service territory in Southern California. Its Southern California Gas Company segment owns and operates a natural gas distribution, transmission, and storage system that supplies natural gas to a population of approximately 21.9 million, covering a 24,000 square mile service territory that encompasses Southern California and portions of central California. The company’s Sempra Texas Utility segment is involved in the regulated transmission and distribution of electricity serving approximately 3.6 million homes and businesses, and operating approximately 137,000 miles of transmission and distribution lines. As of December 31, 2018, its transmission system included 16,000 circuit miles of transmission lines, 306 transmission stations, and 740 distribution substations; and distribution system consisted of 121,000 miles of overhead conductors and underground conductors. Sempra Energy’s Sempra Mexico segment develops, owns and operates, or holds interests in natural gas, electric, LNG, LPG, ethane, and liquid fuels infrastructure; and engages in the purchase of LNG, and purchase and sale of natural gas. This segment operates a natural-gas-fired combined-cycle plant and two wind power generation facilities. Its assets/facilities consisted of 1,353 miles of natural gas transmission pipelines, 12 compressor stations, 139 miles of ethane pipelines, 118 miles of LPG pipelines, and 1 LPG storage terminal. The company was founded in 1998 and is headquartered in San Diego, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 00:15
End of Day Share Price2020/02/18 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.