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How’s Sempra Energy Placed Compared to Its Peers?


Apr. 10 2019, Updated 8:04 a.m. ET

Sempra stock at an all-time high

Sempra Energy (SRE) stock has shown a decent uptrend. Currently, the stock is trading at its all-time high. So far, the stock has risen more than 18% in 2019 and beaten broader utilities.

Sempra Energy is one of the fastest growing utilities in the country. The company’s presence in the most populous states like California and Texas and its improved business mix in the last few years bode well for earnings growth in the long term. Sempra Energy’s fair dividend yield and superior dividend growth also make it an attractive name among utilities.

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Sempra Energy stock has risen 15% in the past year, mirroring utilities (XLU) as a whole. Edison International (EIX) has risen marginally during this period due to its weakness in the fourth quarter related to wildfires. PG&E (PCG) filed for Chapter 11 bankruptcy protection in January.

Sempra Energy is trading at a forward PE ratio of 20x based on analysts’ earnings estimates for the next 12 months. Utilities at large trade at an average forward PE ratio of 17x. Sempra Energy stock looks to be trading at a premium compared to its peers. Edison International (EIX) is trading at 13x its forward earnings, while NextEra Energy (NEE) is trading at 22x.


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