Sempra (NYSE: SRE)

Sector: Utilities Industry: Utilities - Diversified CIK: 0001032208
Market Cap 45.16 Bn
P/B 4.22
P/E 45.90
P/S 4.31
ROIC (Qtr) 0.76
Div Yield % 2.02
Rev 1y % (Qtr) 13.51
Total Debt (Qtr) 32.69 Bn
Debt/Equity (Qtr) 1.05
Add ratio to table...

About

Sempra Energy, a California-based holding company with the ticker symbol SRE, operates in the energy infrastructure sector. The company's primary business activities include regulated public utilities, natural gas transportation and distribution, and energy infrastructure development. Sempra's operations are spread across North America, with a focus on California and Texas. Sempra California, a regulated public utility, provides electric and gas services to customers in Southern California. Its subsidiary, SDG&E, serves approximately 3.6 million...

Read more

Investment thesis

Bull case

  • Strong tangible asset base of 106.92B provides 3.27x coverage of total debt 32.69B, indicating robust asset backing and low credit risk.
  • Operating cash flow of 4.74B provides strong 98.77x coverage of stock compensation 48M, indicating sustainable incentive practices.
  • Long-term investments of 18.08B provide solid 0.62x coverage of long-term debt 28.98B, indicating strategic financial planning.
  • Robust tangible asset base of 106.92B provides 9.11x coverage of working capital 11.74B, indicating strong operational backing.
  • Tangible assets of 106.92B provide robust 7.73x coverage of other current liabilities 13.83B, indicating strong asset backing.

Bear case

  • Operating cash flow of 4.74B barely covers its investment activities of (11.43B), with a coverage ratio of -0.41, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 7M against inventory of 565M, the 0.01 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 4.74B provides thin coverage of dividend payments of (1.57B) with a -3.01 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • High receivables of 1.61B relative to inventory of 565M (2.85 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of (4.91B) provides weak coverage of capital expenditures of 9.65B, with a -0.51 ratio suggesting additional external financing needs for growth initiatives.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Utilities - Diversified
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SRE Sempra 45.16 Bn 45.90 4.31 32.69 Bn
2 BIP Brookfield Infrastructure Partners L.P. 19.75 Bn 57.75 0.89 65.44 Bn
3 AES Aes Corp 10.89 Bn 16.56 0.83 31.90 Bn
4 AQN Algonquin Power & Utilities Corp. 8.39 Bn -225.33 3.51 6.43 Bn
5 AVA Avista Corp 2.94 Bn 19.71 2.18 3.09 Bn
6 UTL Unitil Corp 0.89 Bn 17.81 1.67 0.93 Bn
7 CIG Energy Co Of Minas Gerais 0.00 Bn 0.00 0.00 -

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.53 0.69
EV to Cash from Ops. EV/CFO 28.63 19.02
EV to Debt EV to Debt 1.73 1.58
EV to EBIT EV/EBIT 31.30 20.34
EV to EBITDA EV/EBITDA 20.81 11.94
EV to Free Cash Flow [EV/FCF] EV/FCF -94.38 -22.87
EV to Market Cap EV to Market Cap 1.25 2.15
EV to Revenue EV/Rev 5.39 3.99
Price to Book Value [P/B] P/B 4.22 2.48
Price to Earnings [P/E] P/E 45.90 -11.27
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.30 1.04
Dividend Payout Ratio % Div Payout % (Qtr) 58.60 -25.27
Dividend per Basic Share Div per Share (Qtr) 2.56 1.48
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -33.98 -135.45
Interest Coverage Int. cover (Qtr) 3.43 2.23
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -19.32 17.33
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -98.99 81.54
Dividend Growth (1y) % Div 1y % (Qtr) 4.07 -0.35
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -27.75 98.90
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 13.70 14.34
EBIT Growth (1y) % EBIT 1y % (Qtr) 8.11 41.17
EBT Growth (1y) % EBT 1y % (Qtr) 10.20 73.58
EPS Growth (1y) % EPS 1y % (Qtr) -28.82 56.76
FCF Growth (1y) % FCF 1y % (Qtr) -42.03 62.76
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 12.93 13.93
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.13 0.20
Cash Payout Ratio Cash Payout (Qtr) 0.11 0.23
Cash Ratio Cash Ratio (Qtr) 0.00 0.10
Current Ratio Curr Ratio (Qtr) 1.59 0.98
Debt to Equity Ratio Debt/Equity (Qtr) 1.05 4.25
Interest Cover Ratio Int Coverage (Qtr) 3.43 2.23
Times Interest Earned Times Interest Earned (Qtr) 3.43 2.23
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 51.30 38.38
EBIT Margin % EBIT Margin % (Qtr) 32.48 22.44
EBT Margin % EBT Margin % (Qtr) 23.00 11.60
Gross Margin % Gross Margin % (Qtr) 46.70 37.77
Net Profit Margin % Net Margin % (Qtr) 15.40 7.30