Sempra (SREA) Stock Analysis

Why this analysis is different

• A sector-relative MoonshotScore — five pillars (business quality, financial safety, valuation, growth durability, momentum) re-ranked nightly against the full universe of US-listed common stocks.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

Sempra (SREA) Utility Operations & Dividend Profile

Sempra, an energy-service holding company, focuses on developing and operating energy infrastructure across California, Texas, and other regions. With a diverse portfolio including electric and gas utilities, Sempra serves a wide customer base, navigating the evolving energy landscape and regulatory environments within the utilities sector.

What Is the Investment Thesis for SREA?

Sempra presents a stable investment opportunity within the utilities sector, driven by its regulated business model and strategic infrastructure investments. With a market capitalization of $13.4B and a dividend yield of 2.77%, Sempra offers a blend of income and moderate growth. The company's P/E ratio of 33.8 reflects investor confidence in its earnings potential. Key to Sempra's value is its ability to navigate regulatory landscapes and capitalize on infrastructure development projects. Growth catalysts include expansion in renewable energy and strategic investments in its Texas and infrastructure segments. However, potential risks include regulatory challenges and fluctuations in energy prices, which could impact profitability.

Based on FMP financials and quantitative analysis

SREA Key Highlights

Market Cap of $13.4B indicates substantial investor confidence.

• P/E Ratio of 33.8 reflects earnings expectations.
• Profit Margin of 13.4% demonstrates operational efficiency.
• Gross Margin of 29.3% shows effective cost management.
• Dividend Yield of 2.77% provides a steady income stream for investors.

Who Are SREA's Competitors?

SREA is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are SREA's Key Strengths?

Diversified operations across electric, gas, and infrastructure segments.

• Strong presence in California and Texas, two of the largest energy markets in the US.
• Stable revenue streams from regulated utilities.
• Commitment to renewable energy and sustainability.

What Are SREA's Weaknesses?

Exposure to regulatory risks and political uncertainties.

• Dependence on specific geographic regions.
• Capital-intensive business model.
• Vulnerability to fluctuations in energy prices.

What Could Drive SREA Stock Higher?

Investments in renewable energy projects driving revenue growth.

• Infrastructure development projects enhancing energy security.
• Regulatory approvals for new tariffs and projects.
• Expansion in the Texas energy market through Oncor Holdings.

What Are the Key Risks for SREA?

Financial-distress signal — its Altman Z-Score of 0.70 sits in the distress zone (elevated bankruptcy risk).

• Rich valuation — a P/E of 33.8 runs well above the Utilities sector’s ~19x, leaving little room for a miss.
• Regulatory challenges and political uncertainties impacting project approvals.
• Fluctuations in energy prices affecting profitability.
• Environmental concerns and climate change risks impacting operations.
• Competition from other energy companies.
• Economic downturns reducing energy demand.

What Are the Growth Opportunities for SREA?

• Expansion in Renewable Energy: Sempra has the opportunity to significantly expand its renewable energy portfolio, capitalizing on the growing demand for clean energy solutions. With increasing government incentives and declining costs of renewable technologies, Sempra can invest in solar, wind, and other renewable projects, driving revenue growth and enhancing its sustainability profile. This expansion aligns with global trends towards decarbonization and offers long-term growth prospects.
• Strategic Investments in Texas Utilities: Sempra's investment in Oncor Holdings provides a strong foothold in the rapidly growing Texas energy market. Texas is experiencing significant population and economic growth, driving increased demand for electricity. By strategically investing in Oncor's infrastructure and grid modernization efforts, Sempra can capitalize on this growth and generate substantial returns. This includes upgrading transmission lines and integrating renewable energy sources into the grid.
• Infrastructure Development Projects: Sempra can pursue infrastructure development projects, including pipelines, storage facilities, and LNG export terminals. These projects can enhance energy security, facilitate the transportation of natural gas, and support the growing demand for LNG in international markets. Sempra's expertise in developing and operating energy infrastructure positions it well to secure and execute these projects, driving revenue growth and creating long-term value.
• Technological Innovation and Grid Modernization: Sempra can invest in technological innovation and grid modernization to improve the efficiency, reliability, and security of its energy infrastructure. This includes deploying smart grids, advanced metering infrastructure (AMI), and energy storage solutions. These investments can reduce energy losses, improve grid resilience, and enable the integration of distributed energy resources, creating a more sustainable and efficient energy system.
• Geographic Expansion: Sempra has the opportunity to expand its operations into new geographic markets, both domestically and internationally. This can involve acquiring existing utilities, developing new infrastructure projects, or forming strategic partnerships. By diversifying its geographic footprint, Sempra can reduce its reliance on specific regions and capitalize on growth opportunities in emerging markets. This expansion requires careful assessment of regulatory environments, market dynamics, and competitive landscapes.

What Are SREA's Competitive Advantages?

• Regulated utilities benefit from a natural monopoly in their service areas.
• Significant infrastructure investments create high barriers to entry.
• Long-term contracts and service agreements provide stable revenue streams.
• Strong relationships with regulatory bodies facilitate tariff approvals and project development.

What Does SREA Do?

Founded on October 11, 1996, and headquartered in San Diego, California, Sempra has evolved into a leading energy-service holding company. The company's operations are divided into three primary segments: Sempra California, Sempra Texas Utilities, and Sempra Infrastructure. Sempra California, through its subsidiaries San Diego Gas & Electric (SDG&E) and Southern California Gas Company (SoCalGas), delivers natural gas and electric services to Southern California and parts of central California. Sempra Texas Utilities holds an investment in Oncor Holdings, a significant player in the Texas energy market. Sempra Infrastructure encompasses the operating companies of its subsidiary, SI Partners, along with holding and service companies. Sempra focuses on developing and operating energy infrastructure, including electric and gas services, positioning itself as a key player in the North American energy sector. With a workforce of 16,835 employees, Sempra manages a complex network of energy assets and services, adapting to changing market dynamics and regulatory requirements.

What Products and Services Does SREA Offer?

• Develop and operate energy infrastructure.
• Provide electric services to residential, commercial, and industrial customers.
• Provide natural gas services to residential, commercial, and industrial customers.
• Operate through Sempra California, Sempra Texas Utilities, and Sempra Infrastructure segments.
• Invest in Oncor Holdings through Sempra Texas Utilities.
• Engage in renewable energy projects.

How Does SREA Make Money?

• Regulated utilities generate revenue through tariffs approved by regulatory bodies.
• Infrastructure projects generate revenue through long-term contracts and service agreements.
• Investments in companies like Oncor Holdings provide a share of their earnings.
• Renewable energy projects generate revenue through power purchase agreements (PPAs).

What Industry Does SREA Operate In?

Sempra operates within the regulated electric and gas utilities industry, a sector characterized by stable demand and significant regulatory oversight. The industry is undergoing a transformation with increasing investments in renewable energy and grid modernization. Sempra competes with companies like DUK: Duke Energy Corporation, EVRG: Evergy, Inc., and LNT: Alliant Energy Corporation, all vying for market share in different regions. The industry is influenced by factors such as government policies, environmental regulations, and technological advancements in energy storage and distribution.

Who Are SREA's Key Customers?

• Residential customers in Southern California and parts of central California.
• Commercial customers in Southern California and parts of central California.
• Industrial customers in Southern California and parts of central California.
• Municipalities and government entities.
• Energy companies and other utilities.

Wall Street analysts project Sempra revenue of about $14.77B for fiscal 2026, with EPS near $5.10.

SREA Valuation & Market Position

With a $13.4B market cap, Sempra sits in the large-cap segment of the market. Relative to its peer group, SREA's quantitative score of 38/100 is below the peer average of 51/100.

Return on equity for Sempra stands at 7.1%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 2.0%, showing how much profit it generates from its asset base. SREA trades at a trailing price-to-earnings ratio of 33.82, above the Utilities sector average of ~19x. Its free cash flow yield is -10.4%, a gauge of the cash the business throws off relative to its market value. A current ratio of 1.64 indicates the company holds enough short-term assets to cover its near-term obligations. Its earnings yield is 4.0%, the inverse of the P/E and a quick read on earnings relative to price.

Sempra's Piotroski F-Score is 7/9, a 9-point checklist of profitability, leverage and efficiency — signaling solid underlying fundamentals. Its Altman Z-Score of 0.70 places it in the distress zone, a signal of elevated financial risk.

Company Profile

Sempra operates in the Diversified Utilities industry within the Utilities sector. It is headquartered in San Diego, US. The company is led by CEO Jeffrey Walker Martin. SREA has traded publicly since 2019.

SREA Financials

SREA Latest News

No recent news available for SREA.

SREA Analyst Consensus

SREA MoonshotScore

What Investors Ask About Sempra (SREA) — Utilities

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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