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Here's Why You Should Add Sempra Energy in Your Portfolio

Sempra Energy SRE continues to benefit from its stable earnings from utility subsidiaries and from systematic investments in its infrastructure development projects.

Let’s focus on the factors that make Sempra Energy an attractive investment option.

Zacks Rank & Surprise History

The stock currently carries a Zacks Rank #2 (Buy). The company’s bottom line surpassed the Zacks Consensus Estimate in three of the last four reported quarters, the average being 3.21%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Estimates Revision & Long-Term Growth

Earnings estimates for the company have been revised upward in the past 60 days, reflecting analysts’ confidence in the stock. The Zacks Consensus Estimate for 2020 earnings has moved 0.3% north to $6.91 per share. Moreover, the company’s long-term (three to five years) earnings growth is pegged at 7.73%

Price Performance

In the past 12 months, shares of Sempra Energy have rallied 31.2% compared with the industry’s growth of 18% .

Investment Plan

For the 2019-2023 period, the company expects to make investments of approximately $18.2 billion. The spending includes $13.3 billion for California Utilities and $4.9 billion for other subsidiaries to fund the capital projects in Mexico and South America along with the development of LNG projects. Through these investments, the company aims to modernize its electric transmission lines and substation infrastructure.

Dividend Yield

Sempra Energy has consistently been paying out dividends at increasing rates, courtesy of its solid cash flow from operations. Currently, it has a dividend yield of 2.62% compared with the Zacks S&P 500 composite’s 1.79%.

Other Stocks to Consider

Some other top-ranked stocks from the same sector are The AES Corporation AES, MDU Resources Group, Inc MDU and Atmos Energy Corporation ATO. The AES Corporation currently sports a Zacks Rank #1, while the other two stocks carry a Zack Rank of 2.

The AES Corporation, MDU Resources and Atmos Energy delivered average positive earnings surprise of 4.68%, 2.79% and 3.18%, respectively, in the last four quarters.

The long-term earnings growth rates for The AES Corporation, MDU Resources and Atmos Energy are pegged at 9.11%, 7.10% and 7.20%, respectively.

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The AES Corporation (AES) : Free Stock Analysis Report
MDU Resources Group, Inc. (MDU) : Free Stock Analysis Report
Sempra Energy (SRE) : Free Stock Analysis Report
Atmos Energy Corporation (ATO) : Free Stock Analysis Report
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Zacks Investment Research