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Sempra Energy (SRE) - free report >>
Entergy Corporation (ETR) - free report >>
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Sempra Energy (SRE) - free report >>
Entergy Corporation (ETR) - free report >>
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Reasons to Add Sempra Energy (SRE) to Your Portfolio Now
Sempra Energy (SRE - Free Report) , with rising earnings estimates 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 $4.83 in the past 60 days. The Zacks Consensus Estimate for SRE’s total revenues for 2024 stands at $17.08 billion, indicating year-over-year growth of 1.84%.
The company’s (three to five years) earnings growth is pegged at 4.95%. It delivered an average earnings surprise of 9.03% 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 9.88% compared to its sector’s average of 7.39%. This indicates that the company has been utilizing its funds more constructively than its peers in the industry.
Dividend History
Sempra Energy has been increasing shareholders’ value through dividend payments. In November 2023, SRE announced a quarterly dividend of 59 cents per share and an annual dividend of $2.38 per share. SRE’s current dividend yield is 3.12%, better than the Zacks S&P 500 composite’s yield of 1.6%.
Systematic Investment
SRE continues with systematic investments in its infrastructure development projects. For the 2023-2027 period, the company expects to invest $40 billion, which comprises $21.4 billion in Sempra California, $15.3 billion in Sempra Texas Utilities and $3.6 billion in Sempra Infrastructure.
Solvency
Sempra Energy’s times interest earned ratio (TIE) at the end of the third quarter of 2023 was 2.9. 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.
Price Performance
In the past month, SRE shares have risen 3.6% compared to its industry’s average decline of 2.2%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks related to the same sector are AtmosEnergy (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 $6.56, implying a year-over-year increase of 7.54%.
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 $5.17, calling for a year-over-year increase of 6.78%.
Entergy’s long-term earnings growth rate is pegged at 6.43%. The Zacks Consensus Estimate for the company’s 2024 EPS is pegged at $7.22, indicating a year-over-year rise of 6.94%.