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Reasons to Add Sempra Energy (SRE) to Your Portfolio Now
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Sempra Energy (SRE - Free Report) , with rising earnings estimates, a presence in the LNG space and strategic investments, offers a great investment opportunity in the utility sector.
Let’s focus on the reasons that make this Zacks Rank #2 (Buy) stock a solid investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for SRE’s 2024 earnings per share (EPS) has increased 0.83% to $4.84 in the past 60 days. The Zacks Consensus Estimate for SRE’s total revenues for 2024 stands at $17.54 billion, which indicates year-over-year growth of 4.88%.
The company’s (three to five years) earnings growth is pegged at 4.95%. It delivered an average earnings surprise of 5.51% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, Sempra Energy’s ROE is 9.45% compared to its sector’s average of 8.51%. This indicates that the company has been utilizing its funds more constructively than its peers in the industry.
Solvency
Sempra Energy’s times interest earned ratio (TIE) at the end of the fourth quarter of 2023 was 3. The TIE ratio of more than 1 indicates that the company will be able to meet its interest payment obligations in the near term without any problems.
At the end of the fourth quarter of 2023, SRE’s total debt to capital was 48.01%, better than the industry’s average of 49.64%.
Dividend History
Sempra Energy has been increasing shareholder value through dividend payments. In February 2023, SRE announced a quarterly dividend of 62 cents per share, an increase of 4.2% from the previous level of 59.5 cents per share, resulting in an annual dividend of $2.48 per share. SRE’s current dividend yield is 3.4%, better than the Zacks S&P 500 composite’s yield of 1.29%.
Systematic Investment
SRE continues with systematic investments in its infrastructure development projects. For the 2024-2027 period, the company expects to invest $48 billion, which comprises $24.1 billion in Sempra California, $19.5 billion in Sempra Texas Utilities and $4.4 billion in Sempra Infrastructure.
Price Performance
In the past year, SRE shares have risen 0.1% compared to its industry’s average decline of 4.2%.
Atmos Energy’s long-term earnings growth rate is pegged at 7.26%. The Zacks Consensus Estimate for the company’s fiscal 2024 EPS is pegged at $6.59, which implies a year-over-year increase of 8.03%.
American Water’s long-term earnings growth rate is pegged at 7.76%. The Zacks Consensus Estimate for the company’s 2024 EPS stands at $5.20, which calls for a year-over-year increase of 6.12%.
Entergy’s long-term earnings growth rate is pegged at 7.01%. The Zacks Consensus Estimate for the company’s 2024 EPS is pegged at $7.22, which indicates a year-over-year rise of 6.65%.
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Reasons to Add Sempra Energy (SRE) to Your Portfolio Now
Sempra Energy (SRE - Free Report) , with rising earnings estimates, a presence in the LNG space and strategic investments, offers a great investment opportunity in the utility sector.
Let’s focus on the reasons that make this Zacks Rank #2 (Buy) stock a solid investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for SRE’s 2024 earnings per share (EPS) has increased 0.83% to $4.84 in the past 60 days. The Zacks Consensus Estimate for SRE’s total revenues for 2024 stands at $17.54 billion, which indicates year-over-year growth of 4.88%.
The company’s (three to five years) earnings growth is pegged at 4.95%. It delivered an average earnings surprise of 5.51% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, Sempra Energy’s ROE is 9.45% compared to its sector’s average of 8.51%. This indicates that the company has been utilizing its funds more constructively than its peers in the industry.
Solvency
Sempra Energy’s times interest earned ratio (TIE) at the end of the fourth quarter of 2023 was 3. The TIE ratio of more than 1 indicates that the company will be able to meet its interest payment obligations in the near term without any problems.
At the end of the fourth quarter of 2023, SRE’s total debt to capital was 48.01%, better than the industry’s average of 49.64%.
Dividend History
Sempra Energy has been increasing shareholder value through dividend payments. In February 2023, SRE announced a quarterly dividend of 62 cents per share, an increase of 4.2% from the previous level of 59.5 cents per share, resulting in an annual dividend of $2.48 per share. SRE’s current dividend yield is 3.4%, better than the Zacks S&P 500 composite’s yield of 1.29%.
Systematic Investment
SRE continues with systematic investments in its infrastructure development projects. For the 2024-2027 period, the company expects to invest $48 billion, which comprises $24.1 billion in Sempra California, $19.5 billion in Sempra Texas Utilities and $4.4 billion in Sempra Infrastructure.
Price Performance
In the past year, SRE shares have risen 0.1% compared to its industry’s average decline of 4.2%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same sector are Atmos Energy (ATO - Free Report) , American Water (AWK - Free Report) and Entergy (ETR - Free Report) , each holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Atmos Energy’s long-term earnings growth rate is pegged at 7.26%. The Zacks Consensus Estimate for the company’s fiscal 2024 EPS is pegged at $6.59, which implies a year-over-year increase of 8.03%.
American Water’s long-term earnings growth rate is pegged at 7.76%. The Zacks Consensus Estimate for the company’s 2024 EPS stands at $5.20, which calls for a year-over-year increase of 6.12%.
Entergy’s long-term earnings growth rate is pegged at 7.01%. The Zacks Consensus Estimate for the company’s 2024 EPS is pegged at $7.22, which indicates a year-over-year rise of 6.65%.