Sempra: A Solid Margin Of Safety For A High-Growth Utility (Rating Upgrade)

Summary Sempra is upgraded to Buy, with the current valuation offering a strong margin of safety after recent stock declines. SRE’s Texas investments and LNG growth, including a 20-year Petrobras deal, underpin robust long-term EPS growth guidance of 7–9%. The balance sheet and earnings remain solid, supporting a 3.24% dividend yield and the targeted 2–4% annual dividend growth, with Texas set to comprise 60% of the 2030 rate base. Macro headwinds and California regulatory risks persist, but SRE’s defensive profile and discounted valuation justify a positive outlook. Guido Mieth/DigitalVision via Getty Images Introduction In my previous analysis of Sempra ( SRE ), I downgraded it to a Hold, arguing how the valuation implied a balanced risk-reward that didn’t justify buying anymore. After a solid quarter and the stock declining since then, SRE is upgraded to This article was written by IWA Research 3.63K Followers Follow I've been researching companies in-depth for over a decade, from commodities like oil, natural gas, gold and copper to tech like Google or Nokia and many emerging market stocks, which I believe could help me provide useful content for readers. After writing my own blog for about 3 years, I decided to switch to a value investing-focused YouTube channel, where I researched hundreds of different companies so far. I would say my favorite type of company to cover are metals and mining stocks, but I am comfortable with several other industries, such as consumer discretionary/staples, REITs and utilities. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in SRE over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.