Looking at Sempra Energy’s Current Valuation

Peers’ valuation

Sempra Energy (SRE) stock appears to be trading at a fair premium. On July 11, it was trading at an enterprise-value-to-EBITDA valuation multiple of 15.4x, which is much higher than its five-year historical average.

In comparison, Edison International (EIX), Sempra Energy’s peer in California, has a valuation ratio of 10.0x. PG&E (PCG) is trading at a valuation multiple of 7.4x. PG&E’s discounted valuation is likely due to its massive correction after the wildfires in California.

Looking at Sempra Energy’s Current Valuation

Sempra Energy is currently trading at a PE multiple of 28.0x. EIX is trading at a PE multiple of 24.0x.

Utilities on July 9

Utility stocks (XLU) witnessed a notable correction on July 9 after their smart rally. Despite the rate hike on June 13, broader utilities managed to rise for almost a month. To learn more, read Utilities Stocks Fell after the Recent Rally