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Sempra to Sell Stakes in Chile & Peru, Focus on N. America
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Sempra Energy (SRE - Free Report) recently announced that it has initiated the sale of 100% stake in Chilquinta Energía S.A. in Chile and 83.6% stake in Luz del Sur S.A.A. in Peru. The sale also includes interests in the energy-services companies — Tecnored and Tecsur — which were providing electric construction and infrastructure services to these South American businesses.
The company planned the divestiture to focus on capital investments in the United States and Mexico for additional growth opportunities and become North America's premier energy infrastructure company. The sales are expected to be completed by the end of 2019.
Portfolio Optimization Strategy
The company resorts to the Vision 2022 plan, which includes a disciplined three-phase execution of portfolio optimization and divestitures to strengthen North American business. Per this plan, Sempra Energy expects to witness a solid 13% annualized growth in earnings per share for the 2018-2022 period..
With a target of boosting shareholders’ value and achieve stronger balance sheet, the company is focusing on U.S. and Mexico business. It added two 345-kV projects in West Texas in third-quarter 2018. Apart from Texas, the company is strengthening its footprints in the U.S. Gulf Coast region. Sempra Energy has identified its unit – IEnova – as one of the major growth drivers that is strengthening its position in Mexico. Recently, the company announced the acquisition of a 51% equity interest in the Manzanillo marine terminal project. We expect the latest divestiture to boost Sempra Energy’s portfolio optimization strategy.
Sempra Energy's Capital Investment Plan
The company continues to make systematic investments in its infrastructure development projects. For the 2018-2020 period, Sempra Energy expects to make capital expenditure and investments of approximately $15.2 billion. This plan includes $12.3 billion for California Utilities.
Price Performance
Shares of Sempra Energy have outperformed the industry in the past 12 months. The stock has gained 6.4% compared with the industry’s rise of 6.3%.
Long-term earnings growth of Ameren, NextEra Energy and IDACORP is pegged at 6.78%, 8.60% and 2.60%, respectively.
The Zacks Consensus Estimate for 2019 earnings of Ameren, NextEra Energy and IDACORP have inched up 0.6%, 0.2% and 0.9% in the past 90 days, respectively.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
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Sempra to Sell Stakes in Chile & Peru, Focus on N. America
Sempra Energy (SRE - Free Report) recently announced that it has initiated the sale of 100% stake in Chilquinta Energía S.A. in Chile and 83.6% stake in Luz del Sur S.A.A. in Peru. The sale also includes interests in the energy-services companies — Tecnored and Tecsur — which were providing electric construction and infrastructure services to these South American businesses.
The company planned the divestiture to focus on capital investments in the United States and Mexico for additional growth opportunities and become North America's premier energy infrastructure company. The sales are expected to be completed by the end of 2019.
Portfolio Optimization Strategy
The company resorts to the Vision 2022 plan, which includes a disciplined three-phase execution of portfolio optimization and divestitures to strengthen North American business. Per this plan, Sempra Energy expects to witness a solid 13% annualized growth in earnings per share for the 2018-2022 period..
With a target of boosting shareholders’ value and achieve stronger balance sheet, the company is focusing on U.S. and Mexico business. It added two 345-kV projects in West Texas in third-quarter 2018. Apart from Texas, the company is strengthening its footprints in the U.S. Gulf Coast region. Sempra Energy has identified its unit – IEnova – as one of the major growth drivers that is strengthening its position in Mexico. Recently, the company announced the acquisition of a 51% equity interest in the Manzanillo marine terminal project. We expect the latest divestiture to boost Sempra Energy’s portfolio optimization strategy.
Sempra Energy's Capital Investment Plan
The company continues to make systematic investments in its infrastructure development projects. For the 2018-2020 period, Sempra Energy expects to make capital expenditure and investments of approximately $15.2 billion. This plan includes $12.3 billion for California Utilities.
Price Performance
Shares of Sempra Energy have outperformed the industry in the past 12 months. The stock has gained 6.4% compared with the industry’s rise of 6.3%.
Zacks Rank & Stocks to Consider
Sempra Energy currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks from the same sector are Ameren Corporation (AEE - Free Report) , NextEra Energy, Inc (NEE - Free Report) and IDACORP, Inc (IDA - Free Report) . Ameren and IDACORP sport a Zacks Rank #1(Strong Buy), while NextEra Energy holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth of Ameren, NextEra Energy and IDACORP is pegged at 6.78%, 8.60% and 2.60%, respectively.
The Zacks Consensus Estimate for 2019 earnings of Ameren, NextEra Energy and IDACORP have inched up 0.6%, 0.2% and 0.9% in the past 90 days, respectively.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
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