Sempra (SREA) stock analysis

P/E below its 5-year median

Sempra's P/E of 5.5 is below its own 5-year median of 6.1.

P/E below the industry

Sempra's P/E of 5.5 is below the Combination Electric and Gas, and Other Utility median of 19.0.

EV/EBITDA below its 5-year median

Sempra's EV/EBITDA of 7.8 is below its 5-year median of 8.0.

P/B below the industry

Sempra's price-to-book of 0.38 is below the Combination Electric and Gas, and Other Utility median of 1.71.

Trading below fair value

The share price of $18.88 is below our fair value estimate of $48.39.

Margin of safety over 20%

The price is 61.0% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -1.7% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -6.0% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew 1.2% over the last twelve months; the Combination Electric and Gas, and Other Utility median is 6.0%.

Guidance raised

Sempra raised its full-year 2026 GAAP earnings-per-common share (EPS) outlook on Aug 6, 2026.

Gross margin trend

This company does not report gross profit.

Return on equity under 15%

Return on equity was 7.1% over the last twelve months and averaged 8.0% over five years; we look for 15% on both.

Return on invested capital

Needs operating income and invested capital.

Return on equity below the industry

Sempra's return on equity of 7.1% is below the Combination Electric and Gas, and Other Utility median of 9.2%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin above its 5-year average

Net margin was 16.8% over the last twelve months, against a 5-year average of 15.7%.

Net margin above the industry

Sempra's net margin of 16.8% is above the Combination Electric and Gas, and Other Utility median of 12.2%.

High debt

Debt is 112% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 104% five years ago to 112%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 14.8% of total debt; we look for at least 20%.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 1.64 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 0.58; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Sempra paid dividends worth 7.6% of the share price over the last twelve months.

Yield above Treasuries

The 7.6% yield is above the 4.3% on a 1-year Treasury.

Yield in the top quarter

The top quarter of US dividend payers yield 4.0% or more; Sempra yields 7.6%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 72.0% of net income.

Cash-flow cover

Needs dividends paid and free cash flow.