Sempra Energy's stock has more than doubled since an August
2011 low and was resting Tuesday near an all-time high.
That's pretty good for a public utility that pays a dividend,
San Diego-basedSempra (
) provides electricity and natural gas to 31 million customers
around the U.S. and in Latin America. It was formed in 1998 from
the merger of San Diego Gas & Electric and Southern
Public utilities such as Sempra are regulated monopolies whose
rates are set by state agencies, like the California Public
So, there's not much wiggle room for run-away profit growth.
The Utility-Diversified industry group is currently ranked No.
184 out of 197 tracked by IBD, hardly up there with biotech and
Sempra pays a quarterly dividend of 63 cents a share, which
works out to a 2.8% annual yield.
It expects to take a loss from the closure earlier this year
of the San Onofre Nuclear Power Generating Station. The nuclear
power plant near the coastal town of San Clemente is a familiar
sight to motorists traveling between Los Angeles and San Diego.
It's nearly 80% owned by Southern California Edison and 20% by
San Diego Gas & Electric.
The company is looking for new profitable ventures. Earlier
this year, it signed an agreement to build and operate a
liquified natural gas export facility near Hackberry, La.
Earnings growth tends to be slow. Its five-year EPS growth
rate is 2%. In the most recent quarter, earnings grew 6% and
analysts are expecting a 7% drop in the next report, due Nov.
Analysts are forecasting a 3% EPS increase this year and a 1%
increase next year.
After-tax margins have been running at a fairly steady rate,
sometimes above 10% and sometimes below it. The return on equity
also runs around 10%.