Tags: Sempra | natural | gas | SRE

Sempra a Diversified Natural Gas Provider

By Dan Weil   |   Tuesday, 20 Mar 2012 09:11 AM

Sempra Energy (SRE), California’s third-largest utility, represents one of the top natural gas providers in the country. It has one of the most diversified natural gas operations in the industry.

Created through the 1998 merger of San Diego Gas and Electric and Southern California Gas, Sempra provides natural gas to more than 20 million customers in the southern portion of the state.

Sempra has broadened its portfolio to include unregulated power plants, gas pipelines and storage, and liquefied natural gas. The recent plunge of natural gas prices has diminished its use for now. But the future looks bright, especially given limited oil supplies.

On the regulated utilities side, Sempra plans investments to allow a rate base increase of more than 60 percent through 2015.

Impressive return


It’s no wonder, then, that the company just increased its dividend payment by 25 percent. The stock’s yield recently stood at 4.1 percent. That should boost the total return of shares that already has produced an annualized return of 17.4 percent over the past three years, narrowly beating Morningstar’s average of diversified utility stocks.

The company reaped great rewards last year from its acquisition of utilities in Latin America and strong sales of liquefied natural gas.

Standard & Poor’s analyst Christopher Muir has a four-star buy rating on Sempra shares. He recently raised his stock price target by $4 to $63. That represents a 7 percent increase from recent levels.

Sempra’s profit gained 4 percent to $292 million in the fourth quarter from a year earlier. Revenue climbed 11 percent to $2.6 billion.

The company next reports earnings May 29.

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2012-11-20
 

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