Head-To-Head Survey: Sempra Energy (SRE) and UGI (UGI)

Sempra Energy (NYSE: SRE) and UGI (NYSE:UGI) are both utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Volatility and Risk

Sempra Energy has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500. Comparatively, UGI has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500.



Dividends

Sempra Energy pays an annual dividend of $3.58 per share and has a dividend yield of 3.2%. UGI pays an annual dividend of $1.00 per share and has a dividend yield of 2.2%. Sempra Energy pays out 66.1% of its earnings in the form of a dividend. UGI pays out 43.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Sempra Energy has increased its dividend for 7 consecutive years and UGI has increased its dividend for 32 consecutive years.

Profitability

This table compares Sempra Energy and UGI’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sempra Energy 2.28% 8.86% 2.76%
UGI 8.71% 10.88% 3.65%

Valuation and Earnings

This table compares Sempra Energy and UGI’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sempra Energy $11.21 billion 2.53 $257.00 million $5.42 20.48
UGI $6.12 billion 1.26 $436.60 million $2.29 19.44

UGI has lower revenue, but higher earnings than Sempra Energy. UGI is trading at a lower price-to-earnings ratio than Sempra Energy, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

82.4% of Sempra Energy shares are owned by institutional investors. Comparatively, 78.2% of UGI shares are owned by institutional investors. 0.2% of Sempra Energy shares are owned by insiders. Comparatively, 2.4% of UGI shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations for Sempra Energy and UGI, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sempra Energy 0 4 5 0 2.56
UGI 1 2 1 0 2.00

Sempra Energy currently has a consensus price target of $119.33, indicating a potential upside of 7.52%. UGI has a consensus price target of $47.00, indicating a potential upside of 5.57%. Given Sempra Energy’s stronger consensus rating and higher probable upside, equities analysts plainly believe Sempra Energy is more favorable than UGI.

Summary

Sempra Energy beats UGI on 9 of the 17 factors compared between the two stocks.

Sempra Energy Company Profile

Sempra Energy, together with its subsidiaries, invests in, develops, and operates energy infrastructure, as well as provides electric and gas services in the United States and internationally. The company's San Diego Gas & Electric Company segment engages in the generation, transmission, and distribution of electricity. This segment also sells, distributes, and transports natural gas. Its Southern California Gas Company segment owns and operates a natural gas distribution, transmission, and storage system that supplies natural gas. The company's Sempra South American Utilities segment develops, owns, operates, or holds interests in electric transmission, distribution, and generation infrastructure facilities. Its Sempra Mexico segment owns, develops, and operates natural gas transmission pipelines; liquid petroleum gas and ethane systems; electric generation facilities; a natural gas distribution utility; and liquefied natural gas (LNG) regasification terminals, as well as associated storage terminals. The company's Sempra Renewables segment develops, owns, operates, or holds interests in wind and solar power generation facilities. Its Sempra LNG & Midstream segment develops, owns, operates, or holds interests in LNG, and natural gas midstream assets and operations in Alabama, Louisiana, Mississippi, and Texas. The company primarily serves residential, commercial, and industrial customers. Sempra Energy was founded in 1998 and is headquartered in San Diego, California.

UGI Company Profile

UGI Corporation is a holding company. The Company distributes, stores, transports and markets energy products and related services. It operates through six segments. The AmeriGas Propane segment consists of the propane distribution business of AmeriGas Partners, L.P. The UGI France segment consists of the French LPG distribution business of its subsidiaries, Antargaz, Finagaz and its liquefied petroleum gases (LPG) distribution businesses. The Flaga & Other segment consists of the LPG distribution businesses of Flaga GmbH, AvantiGas Limited and ChinaGas Partners, L.P. The Energy Services segment consists of energy-related businesses conducted by its subsidiary, UGI Energy Services, LLC (Energy Services). The Electric Generation segment consists of electric generation facilities conducted by Energy Services’ subsidiary. The Gas Utility segment consists of the regulated natural gas distribution businesses of its subsidiary, UGI Utilities, Inc.

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