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Relative valuation derived from Utilities sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 42.6GRADE C
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
6.0%
Sector: 9.9%
Dividend Analysis audit
INCOME
2.83%
Trailing Yield
$2.83
Per $100 Invested
Solid dividend yield for income-focused strategies.
Est. Payout Ratio
78%MID
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, SEMPRA ENERGY (SRE) receives a "Hold" rating with a composite score of 50.6/100, ranked #287 out of 4446 stocks. Key factor scores: Quality 43/100, Value 57/100, Momentum 58/100. This is quantitative analysis only — not investment advice.
SEMPRA ENERGY (SRE) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does SEMPRA ENERGY Do?
Sempra operates as an energy-services holding company in the United States and internationally. The company's San Diego Gas & Electric Company segment provides electric services; and supplies natural gas. It offers electric services to approximately 3.6 million population and natural gas services to approximately 3.3 million population that covers 4,100 square miles. Its Southern California Gas Company segment owns and operates a natural gas distribution, transmission, and storage system that supplies natural gas to a population of approximately 22 million covering an area of 24,000 square miles. The company's Sempra Texas Utilities segment engages in the regulated transmission and distribution of electricity serving 3.8 million homes and businesses, and operation of 140,000 miles of transmission and distribution lines. Its transmission system includes 18,249 circuit miles of transmission lines, a total of 1,174 transmission and distribution substations, and interconnection to 130 third-party generation facilities totaling 45,403 megawatts. The company was formerly known as Sempra Energy and changed its name to Sempra in July 2021. Sempra was founded in 1998 and is headquartered in San Diego, California. SEMPRA ENERGY (SRE) is classified as a large-cap stock in the Utilities sector. The company is led by CEO Jeffrey W. Martin and employs approximately 15,400 people, headquartered in San Diego, California. With a market capitalization of $63.6B, SRE is one of the prominent companies in the Utilities sector.
SEMPRA ENERGY (SRE) Stock Rating — Hold (April 2026)
As of April 2026, SEMPRA ENERGY receives a Hold rating with a composite score of 50.6/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.SRE ranks #287 out of 4,446 stocks in our coverage universe. Within the Utilities sector, SEMPRA ENERGY ranks #26 of 112 stocks, placing it in the top quartile of its Utilities peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
SRE Stock Price and 52-Week Range
SEMPRA ENERGY (SRE) currently trades at $98.82. The stock lost $0.93 (0.9%) in the most recent trading session. The 52-week high for SRE is $97.44, which means the stock is currently trading 1.4% from its annual peak. The 52-week low is $61.90, putting the stock 59.6% above its annual trough. Recent trading volume was 1.9M shares, reflecting moderate market activity.
Is SRE Overvalued or Undervalued? — Valuation Analysis
SEMPRA ENERGY (SRE) carries a value factor score of 57/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 27.41x, compared to the Utilities sector average of 23.47x — a premium of 17%. The price-to-book ratio stands at 1.66x, versus the sector average of 1.98x. The price-to-sales ratio is 5.40x, compared to 0.82x for the average Utilities stock. On an enterprise value basis, SRE trades at 14.45x EV/EBITDA, versus 4.75x for the sector.
Overall, SRE's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
SEMPRA ENERGY Profitability — ROE, Margins, and Quality Score
SEMPRA ENERGY (SRE) earns a quality factor score of 43/100, signaling below-average profitability metrics relative to the broader market. The return on equity (ROE) is 6.0%, compared to the Utilities sector average of 9.9%, which is below typical expectations for high-quality companies. Return on assets (ROA) comes in at 2.1% versus the sector average of 3.1%.
On a margin basis, SEMPRA ENERGY reports gross margins of 86.0%, compared to 53.1% for the sector. The operating margin is 15.4% (sector: 21.5%). Net profit margin stands at 19.2%, versus 12.8% for the average Utilities stock. Revenue growth is running at -8.5% on a trailing basis, compared to 20.1% for the sector. Profitability is below benchmark levels, which may reflect industry headwinds, elevated reinvestment, or structural challenges.
SRE Debt, Balance Sheet, and Financial Health
SEMPRA ENERGY has a debt-to-equity ratio of 178.0%, compared to the Utilities sector average of 164.5%. This elevated leverage warrants close monitoring, as it increases the company's sensitivity to rising interest rates and economic downturns. The current ratio is 1.59x, suggesting adequate working capital coverage. Total debt on the balance sheet is $32.69B. Cash and equivalents stand at $5M.
SRE has a beta of 0.58, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for SEMPRA ENERGY is 89/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
SEMPRA ENERGY Revenue and Earnings History — Quarterly Trend
In TTM 2026, SEMPRA ENERGY reported revenue of $11.91B and earnings per share (EPS) of $2.75. Net income for the quarter was $2.35B. Gross margin was 86.0%. Operating income came in at $1.88B.
In FY 2025, SEMPRA ENERGY reported revenue of $13.70B and earnings per share (EPS) of $2.75. Net income for the quarter was $2.07B. Revenue grew 3.9% year-over-year compared to FY 2024. Operating income came in at $1.79B.
In Q3 2025, SEMPRA ENERGY reported revenue of $2.76B and earnings per share (EPS) of $0.12. Net income for the quarter was $150M. Revenue grew -0.7% year-over-year compared to Q3 2024. Operating income came in at $293M.
In Q2 2025, SEMPRA ENERGY reported revenue of $2.70B and earnings per share (EPS) of $0.71. Net income for the quarter was $519M. Revenue grew -10.3% year-over-year compared to Q2 2024. Operating income came in at $467M.
Over the past 8 quarters, SEMPRA ENERGY has demonstrated a growth trajectory, with revenue expanding from $3.01B to $11.91B. Investors analyzing SRE stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
SRE Dividend Yield and Income Analysis
SEMPRA ENERGY (SRE) currently pays a dividend yield of 2.8%. At this yield, a $10,000 investment in SRE stock would generate approximately $$283.00 in annual dividend income. This compares to the Utilities sector average dividend yield of 2.8%, meaning SRE yields less than the typical sector peer. With a net margin of 19.2%, the dividend appears well-covered by earnings, suggesting sustainable payouts going forward.
SRE Momentum and Technical Analysis Profile
SEMPRA ENERGY (SRE) has a momentum factor score of 58/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 36/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 24/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
SRE vs Competitors — Utilities Sector Ranking and Peer Comparison
Comparing SRE against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full SRE vs S&P 500 (SPY) comparison to assess how SEMPRA ENERGY stacks up against the broader market across all factor dimensions.
SRE Next Earnings Date
No upcoming earnings date has been announced for SEMPRA ENERGY (SRE) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy SRE? — Investment Thesis Summary
SEMPRA ENERGY presents a balanced picture with arguments on both sides. Low volatility (stability score 89/100) reduces downside risk.
In summary, SEMPRA ENERGY (SRE) earns a Hold rating with a composite score of 50.6/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on SRE stock.
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Institutional Research Dossier
SEMPRA ENERGY (SRE) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
We maintain a Hold rating on Sempra Energy (SRE). While Sempra operates in a relatively stable, regulated utility environment, providing essential services to millions, its current valuation appears stretched relative to its growth prospects and sector peers. The company's high debt levels and recent revenue decline raise concerns, offsetting the positive aspects of its strong gross margins and stable business model.
The primary driver of our Hold rating is the combination of a premium valuation and a lack of compelling near-term catalysts for significant outperformance. While Sempra's stability and dividend appeal to income-focused investors, the current price does not offer a sufficient margin of safety given the risks associated with its debt burden and the potential for regulatory headwinds. Investors should await a more attractive entry point or evidence of improved growth and financial performance before considering a more bullish stance.
Business Strategy & Overview
Sempra operates as an energy-services holding company, primarily focused on regulated utilities in California and Texas. Its core business revolves around the generation, transmission, and distribution of electricity and natural gas to residential, commercial, and industrial customers. The company's strategy centers on investing in infrastructure upgrades and expansions to enhance reliability, safety, and efficiency of its networks. A significant portion of Sempra's capital expenditure is directed towards modernizing its transmission and distribution systems, particularly in California, to support the state's ambitious renewable energy goals.
Sempra's geographic diversification across California and Texas provides a degree of resilience, as regulatory and economic conditions vary between the two states. The company's focus on regulated utilities ensures a relatively stable revenue stream, as rates are typically set by regulatory bodies based on cost of service. However, this also means that Sempra's growth potential is somewhat limited by the regulatory environment and the pace of infrastructure investments.
A key aspect of Sempra's strategy is its commitment to sustainability and the transition to cleaner energy sources. The company is actively involved in developing renewable energy projects, such as solar and wind farms, and is investing in technologies to support the integration of these resources into its grid. This focus on sustainability aligns with the growing demand for clean energy and helps Sempra position itself for long-term growth in a rapidly evolving energy landscape.
Sempra's business model relies on maintaining strong relationships with regulatory agencies and stakeholders. The company must navigate complex regulatory frameworks to obtain approvals for its infrastructure projects and rate adjustments. Effective communication and collaboration with regulators are crucial for Sempra's success. Furthermore, the company actively engages with communities and environmental groups to address concerns and ensure that its operations are conducted in a responsible and sustainable manner.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
-8.5%
Sector: 20.1%
-142% VS SCTR
Economic Moat Analysis
Sempra possesses a Narrow economic moat, primarily derived from its regulated utility operations. The company's regulated monopolies in Southern California and Texas create significant barriers to entry, as it would be extremely difficult and costly for new competitors to replicate its extensive infrastructure and obtain the necessary regulatory approvals. This protected market position allows Sempra to earn relatively stable returns on its investments.
The regulatory environment acts as a double-edged sword. While it provides a degree of protection from competition, it also limits Sempra's ability to freely set prices and expand its operations. Rate adjustments are subject to regulatory approval, which can be a lengthy and uncertain process. Furthermore, regulatory scrutiny can increase operating costs and compliance burdens.
Sempra's large customer base and geographic footprint contribute to its moat. Serving millions of customers across diverse regions provides a degree of scale and diversification. The company's extensive transmission and distribution networks represent a significant sunk cost, making it difficult for competitors to enter the market and compete effectively. However, the moat is not impenetrable. Technological advancements, such as distributed generation and microgrids, could potentially disrupt the traditional utility model and erode Sempra's competitive advantage over time.
The company's brand reputation and customer relationships also contribute to its narrow moat. Sempra has a long history of providing reliable energy services to its customers, which has helped it build trust and loyalty. However, customer satisfaction can be affected by factors such as service disruptions, rate increases, and environmental concerns. Maintaining a strong reputation and positive customer relationships is crucial for Sempra to preserve its competitive advantage.
Financial Health & Profitability
Sempra's financial health presents a mixed picture. While the company boasts a strong gross margin of 86.0%, significantly higher than the sector average of 53.3%, its revenue growth has been negative, with a decline of 8.5% compared to the sector's positive growth of 20.1%. This revenue decline is a cause for concern, as it indicates potential challenges in expanding its business or maintaining its market share.
The company's net income of $2.07 billion translates to a net margin of 19.2%, which is favorable compared to the sector average of 12.8%. However, its return on equity (ROE) of 6.1% is significantly lower than the sector average of 10.0%, suggesting that Sempra is not generating as much profit from its shareholders' equity as its peers.
Sempra's balance sheet is characterized by a high level of debt. With total debt of $32.69 billion and a debt-to-equity ratio of 178.00, the company is more leveraged than the sector average of 165.00. This high debt burden could constrain Sempra's financial flexibility and increase its vulnerability to interest rate fluctuations. However, the company's current ratio of 1.59 indicates that it has sufficient liquid assets to cover its short-term liabilities.
Analyzing the quarterly financial history reveals a fluctuating trend in revenue and net income. While the company experienced strong performance in Q1 2025, with revenue of $3.68 billion and net income of $919 million, subsequent quarters saw a decline in both metrics. This volatility highlights the potential for variability in Sempra's financial performance and the need for careful monitoring of its results.
Valuation Assessment
Sempra's valuation appears stretched compared to its sector peers. The company's price-to-earnings (P/E) ratio of 33.4x is significantly higher than the sector average of 22.7x, suggesting that investors are paying a premium for its earnings. While the company's EV/EBITDA ratio of 3.4x is lower than the sector average of 4.8x, this may be due to its high debt levels, which can artificially depress the ratio.
Given the company's negative revenue growth and relatively low ROE, the premium valuation is difficult to justify. Investors may be pricing in expectations of future growth or improvements in profitability, but these expectations are not yet reflected in the company's current financial performance. The high debt burden also adds to the risk associated with the valuation, as it could limit Sempra's ability to invest in growth opportunities or return capital to shareholders.
The company's free cash flow (FCF) of $11.14 billion is a positive sign, as it indicates that Sempra is generating ample cash from its operations. However, it's important to consider how this cash is being used. If the company is primarily using its FCF to pay down debt or fund capital expenditures, it may not be available for dividends or share repurchases, which could limit its appeal to investors.
Overall, Sempra's valuation appears to be at the higher end of its historical range and above its sector peers. While the company's stability and dividend may attract some investors, the current price does not offer a significant margin of safety, particularly given the risks associated with its debt burden and the potential for regulatory headwinds. A more attractive entry point may be warranted before considering a more bullish stance.
Risk & Uncertainty
Sempra faces several key risks that could impact its financial performance and valuation. Regulatory risk is a significant concern, as the company's operations are heavily regulated by state and federal agencies. Changes in regulations, such as stricter environmental standards or limitations on rate increases, could increase Sempra's operating costs and reduce its profitability. The political climate in California, in particular, presents ongoing regulatory uncertainty.
Another risk is related to the company's high debt levels. Sempra's substantial debt burden increases its vulnerability to interest rate fluctuations and economic downturns. A rise in interest rates could increase the company's borrowing costs and reduce its cash flow. Furthermore, an economic recession could reduce demand for energy and negatively impact Sempra's revenue.
Wildfires pose a significant threat to Sempra's operations in California. The company's infrastructure, including power lines and gas pipelines, is vulnerable to damage from wildfires, which could result in significant financial losses and reputational damage. Sempra has faced legal challenges and financial penalties related to its alleged role in causing wildfires in the past, and this risk remains a concern.
Competition from alternative energy sources, such as solar and wind, could also erode Sempra's market share over time. As the cost of renewable energy continues to decline, more customers may choose to generate their own electricity or switch to alternative energy providers. This could reduce demand for Sempra's traditional energy services and negatively impact its revenue.
Bulls Say / Bears Say
The Bull Case
BULL VIEWSempra's regulated utility business provides a stable and predictable revenue stream, making it a safe haven for investors seeking income and capital preservation.
BULL VIEWThe company's commitment to renewable energy and infrastructure upgrades positions it to benefit from the growing demand for clean energy and the modernization of the grid.
BULL VIEWSempra's geographic diversification across California and Texas provides resilience and reduces its exposure to regulatory and economic risks in any single region.
The Bear Case
BEAR VIEWSempra's high debt levels and negative revenue growth raise concerns about its financial health and ability to generate sustainable returns for shareholders.
BEAR VIEWThe company's premium valuation is not justified by its current financial performance, making it vulnerable to a correction if growth does not materialize.
BEAR VIEWRegulatory risks and the threat of wildfires in California pose significant challenges to Sempra's operations and could result in substantial financial losses.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score SRE and 4,400+ other equities.
SEMPRA ENERGY exhibits a 190% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
2.1%
Sector: 3.1%
Gross Margin
Pricing power and cost efficiency
86.0%
Sector: 53.1%
Operating Margin
Core business profitability
15.4%
Sector: 21.5%
Net Margin
Bottom-line profitability
19.2%
Sector: 12.8%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield2.83%
Yield Delta0%
Income Projection audit
A $10,000 investment would generate approximately $283 annually in dividends at the current trailing rate.
