Sempra Energy

Rumors of Warren Buffett buying into Boeing (NYSE:BA) have filled the air this week. The legendary investor’s interest in airline stocks is well known.

PG&E will exit Chapter 11 bankruptcy by the end of June. The stock might continue to be volatile in trading as this deadline nears amid uncertainties.

This year is going to be crucial for PG&E (PCG) and its investors. The utility has a deadline of June 30, 2020, to exit Chapter 11 bankruptcy.

On Thursday, PG&E’s chairman, Bill Johnson, said that preventive power shutoffs could continue for at least five more years.

Recently, uncertainty continued to pour in for PG&E (PCG). The bankruptcy court judge approved the company’s $13.5 billion settlement with wildfire victims.

California Governor Gavin Newsom rejected PG&E’s (PCG) reorganization plan on December 13. The rejection is a huge setback for the company.

Creditors have lobbied California governor Gavin Newson to reject PG&E’s recent $13.5 billion settlement with wildfire victims.

Last week, PG&E reached a settlement to resolve individual claims associated with wildfires in the last few years. The agreement is valued at $13.5 billion.

Berkshire Hathaway’s huge cash pile might stay in place for a while. Warren Buffett was outbid by Apollo Global Management in his efforts to buy Tech Data.

Recently, PG&E stock continued to rise. The stock has gained in seven of the last eight trading sessions. Collectively, the stock has risen more than 30%.

Bankrupt utility PG&E Corporation (PCG) stock started December off on a positive note, gaining more than 5% on December 2.

PG&E was strongly criticized for its preemptive blackouts this season, but according to the company, the blackouts prevented significant damage.

Investors may be seeing a lot of reports about rising US LNG (liquefied natural gas) exports. Let’s review the basics of LNG.

Yesterday, a judge denied PG&E’s plea to reduce its current wildfire liability by dodging inverse condemnation, according to the San Francisco Chronicle.

Investors keep turning to defensives this year amid uncertainties in the broader markets. Some of the top utility stocks have outperformed their peers at large.

While PG&E Corporation (PCG) continues to tackle deadly wildfires and preemptive blackouts, it’s also readying for a major winter storm this week.

PG&E’s (PGE) troubles continue to mount every day. The bankrupt utility needs to raise a total of $12 billion by December 6 to fund its restructuring plan.

PG&E (PCG) shares rose 15% last week. While the utility’s troubles continue to mount, the stock’s large swings haven’t stopped.

The wild swings continued in PG&E stock yesterday. The stock gained another 13%. The company has come up with a compensation plan for wildfire victims.

PG&E reported a net loss of $1.6 billion during Q3, mainly driven by $2.5 billion pretax charges for claims related to the 2017 and 2018 wildfires.

PG&E gained for the sixth straight day amid increased uncertainty. The stock has gained more than 80% during this period and closed at $8 on Tuesday.

PG&E stock rose about 9% today at 10:00 AM ET. Shares of the bankrupt utility fell more than 65% following California’s recent wildfires and power shutoffs.

Last week, in an interview, California Governor Gavin Newsom proposed that Warren Buffett bid for PG&E Corporation (PCG).

PG&E has disclosed one of its transmission lines malfunctioned just before the Kincade Fire broke out, prompting its stock to fall more than 30% on Friday.

Edison International has a mean target price of $71.5—compared to its current market price of $60.3.

There was significant downward pressure on PG&E (PCG) stock in January before it filed for Chapter 11 bankruptcy protection.

PG&E stock rose almost 20% last week after Governor Newsom suggested having a wildfire fund in order to finance wildfire-related liabilities.

Sempra Energy (SRE), including dividends, returned more than 18%, while broader utilities (XLU) returned 17% in the last 12 months.

Currently, Sempra Energy (SRE) stock offers a dividend yield of 3%, which is in line with the industry average.

At the end of the fourth quarter of 2018, Sempra Energy (SRE) had a net debt of $25.2 billion.

Sempra Energy intends to invest ~$25 billion for the next five years, which is expected to grow its rate base ~9% compounded annually through 2023.

Sempra Energy (SRE) stock has shown a decent uptrend. Currently, the stock is trading at its all-time high.

According to Reuters, PG&E (PCG) won a court approval on March 27 for a $5.5 billion loan to help keep up its electric and gas delivery operations.

Exelon (EXC) has a median target price of $49.9 for the next 12 months. UBS raised Exelon’s target price from $53.0 to $56.0 last week.

In this series, we’ll take a look at what Wall Street analysts currently think of some of the big utility names.

AES Corporation (AES) stock, the top gainer of 2019, offers an estimated gain of just 0.5% for the next 12 months based on analysts’ target price of $17.8.

In this part of our series, we’ll discuss the institutional ownership in the top utility stocks during the fourth quarter.

PPL (PPL) is trading at a forward PE ratio of 13x based on analysts’ EPS estimates for 2019. PPL appears to be trading at a discounted valuation.

So far, Sempra Energy (SRE) stock has risen almost 10% in 2019. Currently, Sempra Energy is trading at $117.1.

At the end of the third quarter, Sempra Energy’s net debt-to-EBITDA ratio was 6.7x—higher than its historical average of ~5x.

Currently, Edison International (EIX) offers a dividend yield of 4.3%, which is much higher than its five-year average.

Sempra Energy is currently trading at a forward PE ratio above 19x based on analysts’ earnings estimates for the next 12 months.

Sempra Energy (SRE) and Edison International (EIX) underperformed their peers in the last few years in terms of total returns.

Edison International stock has lost ~20% in the last three months since the deadly wildfires in November.

Sempra Energy (SRE), the largest utility by market cap in California, is trading at a forward PE ratio above 18x based on the EPS estimates for 2019.

Sempra Energy has a median target price of $126.6 compared to its current market price of $111.8.

Analysts have given NRG Energy a median target price of $44.5, which implies an ~14% upside potential compared to its current price of $39.0.

Sempra Energy (SRE), the largest utility stock by market cap in California, is trading at a forward PE ratio above 19x.

PG&E (PCG) stock offers a handsome upside potential of 71% going forward. Wall Street analysts have given it a median target price of $40.2.

Among the 16 analysts covering PG&E, eight recommended a “hold,” four recommended a “buy,” and four recommended a “strong buy.”

PG&E (PCG) has lost almost $11 billion of its market capitalization over the past month. PG&E stock is trading at a notable discount.

On December 13, PG&E (PCG) filed its 2020 general rate case with the California Public Utilities Commission.

Sempra Energy (SRE), California’s largest utility by market capitalization, has stayed strong in the stock market while other California utilities have tumbled due to recent wildfires.

PG&E stock is trading at a forward PE multiple of 7x based on analysts’ estimated earnings for the next year.

All the top institutional investors raised their stakes in Sempra Energy (SRE), California’s biggest utility by market cap, in the third quarter.

PG&E stock has lost more than 34% in the last two trading sessions. Rampant wildfires have caused record damages in northern California.

Recently, PG&E (PCG) witnessed one of the highest implied volatility levels among its peers. On October 9, PG&E’s implied volatility was 36%.

PG&E is trading at a forward PE ratio of 12x—based on the estimated EPS in 2019. PG&E’s ratio is lower than its peers’ average forward PE ratio.

On October 9, fire investigator Cal Fire said that PG&E’s (PCG) sagging power lines and heavy winds started the Cascade fire in October 2017.

Currently, Sempra Energy (SRE) stock is trading at $114.3, nearly 1% below its 50-day moving average and 3% above its 200-day moving average levels.

Currently, Edison International (EIX) offers the highest among California utilities.

In the last five years, Sempra Energy returned more than 9%, while Edison International and PG&E returned 11.5% and 7% compounded annually.

On September 18, Sempra Energy announced a cooperation agreement with its activist shareholders Elliott Management and Bluescape Energy Partners.

PG&E (PCG) has an upside potential of 7% going forward. It has a mean price target of $48.07 against its current market price of $44.70.

T. Rowe Price, Sempra Energy’s (SRE) largest institutional investor, sold 4 million SRE shares in the first quarter.

According to the Wall Street analyst consensus, Sempra Energy (SRE) stock has a mean price target of $119.3 against its current market price of $112.9.

Free cash flow is generally calculated as the difference between operating cash flow and capital expenditure.

Utilities (XLU) have been weak and have fallen more than 12% since the last interest rate hike in December 2017.

Sempra Energy (SRE) is trading at an EV-to-EBITDA multiple of 13x—higher than its five-year historical average.

Sempra Energy (SRE) became the largest utility by market capitalization in California after PG&E’s (PCG) wildfire fiasco.

Sempra Energy (SRE) became the largest utility by market capitalization in California after PG&E’s (PCG) steep fall in 4Q17.

PG&E (PCG) reported its 4Q17 and fiscal 2017 earnings on February 9, 2018. The utility reported earnings of $0.63 per share.

Duke Energy (DUK) and Southern Company’s (SO) total returns were 1% and -6%, respectively, in the past year.

Sempra Energy (SRE) has a mean target price of $121.9—compared to its current market price of $107.2. It shows an upside potential of 14% going forward.

Dominion Energy and Sempra Energy both expect to increase their long-term debt, which could dent their leverage ratio at least in the short term.

Dominion Energy (D) announced its agreement to buy SCANA (SCG) on January 3, 2017. The deal is expected to accelerate Dominion Energy’s earnings growth.

California-based Sempra Energy (SRE) has emerged as the largest utility by market cap in the state after PG&E Corporation’s (PCG) wildfire fiasco.

The recent correction in Edison International (EIX) stock has made it look significantly cheap compared to its peers.

On December 21, 2017, PCG announced that it had suspended its 4Q17 dividend due to uncertainty related to the liabilities associated with the California wildfires.

PG&E (PCG) stock fell a huge 13% on December 21. The utility suspended its 4Q17 dividend amid mounting uncertainties related to its liabilities linked to the fires in the state.

According to Wall Street analyst consensus, PPL (PPL) has a mean price target of $39.71 against its current market price of $35.91, which shows a gain potential of approximately 11% going forward.

According to Wall Street analysts, PG&E (PCG) stock has a mean target price of $65.85—compared to its current market price of $55.83.

PG&E is trading at an EV-to-EBITDA valuation multiple of 7.5x—lower than utilities’ average valuation of 11x. Its five-year historical average is near 9x.

Exelon (EXC) stock rose 1.4% and reached a 52-week high of $40.81 after the release of its third quarter earnings on November 2, 2017.

Sempra Energy Sempra Energy (SRE) became California’s biggest utility by market capitalization after PG&E’s (PCG) epic fall last month. The Vanguard Group, which holds 7.2% of Sempra Energy’s outstanding shares, added 0.34 million shares in 3Q17. At the end of September 30, 2017, Vanguard held 18.1 million Sempra Energy shares. According to a recent report, […]

Sempra Energy (SRE) stock appears to be trading at a fair premium. On October 31, 2017, it was trading at an EV-to-EBITDA valuation multiple of 15.4x.

PG&E (PCG) stock has rallied approximately 14.0%, while peers Edison International (EIX) and Sempra Energy (SRE) have risen 8.0% and 13.0%, respectively, year-to-date.

Sempra Energy’s revenue for the first half of 2017 rose 7.0%, driven by every segment.

In 2016, Sempra’s payout ratio was 55.0%, which means it distributed 55.0% of its profits to shareholders in the form of dividends.

According to Wall Street analysts’ consensus, Sempra Energy (SRE) has a price target of $119.77, which implies an estimated gain of ~1% going forward.

Currently, XLU is trading at a dividend yield of 3.5%, while Sempra Energy (SRE) and Edison International (EIX) offer yields below 3%. PG&E yields 3.1%.

At the end of 2Q17, PG&E had a total debt of $18.5 billion, while Sempra Energy had total debt of $18.1 billion. Its debt might increase going forward.

Edison International (EIX) is trading 1% and 4% above its 50-day and 200-day moving averages, respectively. Levels near $79.0 might act as a support.

Currently, three major utility holding companies operate in California—PG&E (PCG), Sempra Energy (SRE), and Edison International (EIX).

Sempra Energy is expected to fund the $9.45 billion Oncor acquisition using its own debt and equity as well as third-party equity.

Sempra Energy stock rose 1.6% and hit an all-time high of $118.78 after the news of Oncor’s acquisition. It has risen nearly 10% in the last 12 months.

On August 20, 2017, California-based Sempra Energy declared its agreement to buy Texas-based Oncor Electric from Energy Future Holdings for $9.45 billion.

KMI believes that in addition to the increase in demand for natural gas transportation, there are strong drivers to increase gas storage demand.

Analysts see upside potential of 12% in AES Corporation (AES) stock from its current levels.

Sempra Energy paid annual dividends totaling $3.02 per share in 2016, while EIX and PCG paid per-share dividends of $1.98 and $1.93, respectively, in 2016.