Sempra Energy is one of the leading utility companies in the Southern California region. It also has a presence in Texas through Oncor, a large utility company in which Sempra has a majority stake. Utility companies are usually low-growth stocks that have stable cash flow dynamics and payout attractive dividends. They are viewed by investors as relatively “safe haven” investments. Oncor has been experiencing strong growth in its territory, something that the company’s CEO – Jeffrey Martin, alluded to during the most recent earnings release. If you are looking to buy top utilities stocks, then prominent players with geographic diversity like Sempra Energy are good prospects to consider. With utility companies, higher energy consumption through population growth and other factors is a significant trend. Equally important is the company’s outlook towards sustainability and renewable energy. After all, governments all around the world are coming out with regulations that push forward the transition to clean energy. Utility companies have to play a significant role.
Q22021 Revenue Up But Net Income Down
On 5th August 2021, Sempra Energy reported its second-quarter 2021 earnings results. Revenue rose from $2.5 billion in Q22020 to $2.7 billion. However, net income dropped from $2.2 billion in Q22020 to $424 million. Earnings per share on a diluted basis fell from $7.61 to $1.37. Out of the net income of $424 million, $186 million was attributable to the company’s SDG&E segment, $138 million was attributable to the Sempra Texas Utilities segment, and $94 million was attributed to the SoCalGas segment. All the segments of Sempra Energy reported a growth in revenue as compared to Q22020. Sempra Energy is often one of the names on any list of utilities stocks to buy.
Sempra Energy is up 170% on a 10-year basis when looking at August 2011 to August 2021. It has also increased its dividends from $1.92 per share to over $4 per share. The payout ratio has been a little higher than 60% in recent times.