Sempra Energy’s ( SRE Quick Quote SRE - Free Report) ongoing systematic investments in infrastructure development, efficient debt management and continuous progress in liquefied natural gas (“LNG”) projects are likely to drive its performance in the long run. Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment. You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here Growth Projection & Surprise History
The Zacks Consensus Estimate for 2022 earnings has moved up by 1.9% in the past 60 days to $8.65 per share. Revenue estimates for 2022 of $14.2 billion imply year-over-year growth of 10.2%.
Sempra’s long-term (three to five years) earnings growth is projected at 5.8%. SRE delivered an average earnings surprise of 4.4% in the last four quarters. Investments & Developing LNG Projects
Sempra Energy continues to make systematic investments in infrastructure development projects. For the 2022-2026 period, SRE expects to invest $36 billion, which comprises $21.2 billion in Sempra California, $12.1 billion in Sempra Texas and $2.3 billion in Sempra Infrastructure. These planned investments are expected to strengthen infrastructure and enable Sempra to serve customers more efficiently.
As the demand for LNG continues to rise worldwide, Sempra is engaged in advance commercial discussions with many LNG projects. The ECA LNG Phase 1 is currently at the construction stage and is expected to come online during the second half of 2024. In addition, the developing Cameron LNG Phase 2, Hackberry CCUS, Port Arthur LNG and ECA LNG Phase 2 projects will further strengthen Sempra Energy’s position in the global LNG market. Debt Position
The Debt to Capital of Sempra at the end of the second quarter of 2022 was 47.2% compared with the industry average of 49%. This indicates that SRE is using comparatively lower debts to manage the business compared with peers.
Return on Equity
Return on Equity (“ROE”) indicates how efficiently a company is utilizing shareholders’ funds in the business to generate returns. At present, Sempra’s ROE is 11%, higher than the
industry average of 9.7%. This indicates that the company is utilizing the funds more effectively than industry peers. Price Performance
In the past six months, the stock has rallied 9.2% compared with the industry’s 4.3% growth.
Image Source: Zacks Investment Research Other Stocks to Consider
Some other similar-ranked stocks from the Zacks Utility sector include
Atmos Energy ( ATO Quick Quote ATO - Free Report) , National Fuel Gas Company ( NFG Quick Quote NFG - Free Report) and Alliant Energy ( LNT Quick Quote LNT - Free Report) . The long-term earnings growth of Atmos Energy, National Fuel Gas Company and Alliant Energy is projected at 7.5%, 13.6% and 6.2%, respectively. The Zacks Consensus Estimate for 2022 earnings per share of Atmos Energy, National Fuel Gas Company and Alliant Energy has moved up 8.8%, 37.5% and 6.5% year over year, respectively. ATO, NFG and LNT delivered an average earnings surprise of 1.5%, 9.1% and 5.8%, respectively, in the last four quarters.