Sempra's Dividend Analysis
Insights into Sempra's Upcoming Dividend and Financial Health
Sempra (NYSE:SRE) recently announced a dividend of $0.62 per share, payable on 2024-04-15, with the ex-dividend date set for 2024-03-20. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Sempra's dividend performance and assess its sustainability.
What Does Sempra Do?
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Sempra Energy serves one of the largest utility customer bases in the United States. It distributes natural gas and electricity in Southern California and owns 80% of Oncor, a transmission and distribution business in Texas. SoCalGas and San Diego Gas & Electric distribute gas to more than 20 million customers, while Oncor serves more than 10 million Texas customers. Sempra Infrastructure partners, of which Sempra holds a controlling ownership, owns and operates liquefied natural gas facilities in North America and infrastructure in Mexico.
A Glimpse at Sempra's Dividend History
Sempra has maintained a consistent dividend payment record since 1984, distributing dividends on a quarterly basis. Additionally, Sempra has increased its dividend annually since 2000, earning it the status of a dividend achiever, a distinction reserved for companies with a minimum of 24 consecutive years of dividend increases. Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down Sempra's Dividend Yield and Growth
Sempra currently has a trailing dividend yield of 3.39% and a forward dividend yield of 3.53%, indicating an expectation of increased dividend payments over the next 12 months. Over the past three years, Sempra's annual dividend growth rate was 4.40%, which rises to 5.80% over a five-year period, and a ten-year growth rate of 7.10%. Consequently, the 5-year yield on cost for Sempra stock is approximately 4.49%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one must examine the company's payout ratio. Sempra's dividend payout ratio is currently 0.52, suggesting a balance between distributing earnings as dividends and retaining funds for future growth and financial stability. Sempra's profitability rank, at 7 out of 10, indicates strong earnings potential compared to its peers. The company has also reported consistent net income over the last decade, reinforcing its robust profitability profile.
Growth Metrics: The Future Outlook
Sempra's growth rank of 7 out of 10 reflects a favorable growth trajectory among competitors. Its revenue per share and 3-year revenue growth rate of 10.80% annually outperform approximately 61.1% of global competitors. Furthermore, Sempra's 3-year EPS growth rate of 8.00% per year surpasses approximately 58.43% of global competitors. The 5-year EBITDA growth rate of 14.10% also outperforms roughly 75.28% of global competitors, painting a promising picture for the company's continued growth and dividend sustainability.
Next Steps
In conclusion, Sempra's consistent dividend payments, strong dividend growth rate, balanced payout ratio, solid profitability, and positive growth metrics position it as a potentially attractive option for value investors focused on income-generating stocks. As the company continues to navigate the evolving energy landscape, these financial health indicators will be crucial for investors assessing the long-term viability of Sempra's dividend program. For those seeking to expand their portfolio with high-dividend yield stocks, the High Dividend Yield Screener available to GuruFocus Premium users is an invaluable tool.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
