Sempra Energy’s (SRE - Free Report) earnings estimates have been revised upward over the past 60 days, reflecting analysts’ optimism surrounding the stock. The Zacks Consensus Estimate for 2020 and 2021 earnings has moved up 0.6% and 0.3%, respectively, during the said period.
The company and its subsidiaries are involved in the sale, distribution, storage and transportation of electricity and natural gas.
Let’s focus on the factors that make it a good investment option at the moment.
Strong Investment Plan
Sempra Energy has well-chalked plans to invest $32 billion in different projects within the 2020-2024 time period. These investments will be directed to modernize and strengthen the company’s existing infrastructure. More than 85% of the planned capital expenditure will be used for strengthening its U.S. utilities.
Quarter to date, Sempra Energy’s shares have gained 6.3% compared with the industry’s growth of 4.9%.
Return on Equity (ROE)
The company’s ROE of 11.3% compared with the industry average of 8.89% indicates that it is more efficient in utilizing shareholders’ funds than industry peers.
Long-Term Growth and Dividend Yield
The company’s long-term (three to five years) earnings growth is projected at 6.9%, courtesy of well chalked-out capital investment plans to strengthen electric and natural gas operations.
Its current dividend yield is 3.47% compared with the Zacks S&P 500 composite’s average of 2.23%.
Zacks Rank & Other Key Picks
Sempra Energy currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other top-ranked stocks from the same sector include NextEra Energy (NEE - Free Report) , Vistra Energy Corp. (VST - Free Report) and NRG Energy (NRG - Free Report) , each holding a Zacks Rank of 2.
Long-term earnings growth of NextEra Energy, Vistra Energy and NRG Energy is projected at 7.7%, 11.9% and 44.6%, respectively.
NextEra Energy’s earnings estimates have remained stable over the past 30 days and it delivered average positive earnings surprise of 2.4% in the last four quarters.
The Zacks Consensus Estimate for 2020 earnings for Vistra Energy and NRG Energy has moved up 5.5% and 1.1%, respectively, in the past 30 days.
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