If you are looking to buy high dividend stocks that offer stability and predictability, then consider investing in the utility sector. Sempra Energy is one of the well-known utility companies and serves a large customer base in Southern California as well as Texas. Sempra Energy mainly serves the San Diego area and it also owns an 80% stake in Oncor, a company that distributes energy to customers over 10 million customers in Texas. Utility companies are viewed as the bellwethers of economic recovery and with the pandemic expected to come under control once vaccination drives reach scale, there are reasons to be optimistic about the sector.
A Brief Background Of Sempra Energy
Sempra Energy was created in 1998 when Pacific Enterprises merged with Enova Corporation. Then in 1999, Sempra Energy acquired two utilities in South America. The recent major move happened in 2018 when Sempra Energy received approval for purchasing an 80% stake in Texas-based Oncor as part of a $9.45 billion deal. In January of 2019, Sempra Energy was added to the Dow Jones Utility Average, positioning its stock for higher institutional buying. In April 2020, Sempra sold its South American businesses to completely exit from that geographical market. In 2020, Sempra Energy was named in Fortune Magazine’s list of the World’s Most Admired Companies. The company has also received several awards for its diversity and inclusion efforts, making it an interesting investment from an ESG perspective in spite of the fact that it uses fossil fuels as raw material for electricity production.
Sempra Energy’s stock closed at $124 on 1st February 2021. The stock had gained 66% since January 2016 before the pandemic hit the world. Currently, the stock is up 31% on a 5-year basis. A significantly larger peer of Sempra Energy is Next Era Energy. Its stock closed at $81 on 1st February 2021. Next Era has grown impressively by 187% over a 5-year period.