December 09, 2025 a 03:31 am
SRE: Dividend Analysis - Sempra
Sempra, with a rich history of consistent dividend payouts over 42 years, is a reputable player in the utilities sector. Boasting a dividend yield of 2.93%, its resilience shines through a modest yet steady dividend growth. Despite a historical suspension in 2000, its financial strategies appear robust, although current payout ratios suggest cautious monitoring is needed. Investors may find value in its balance of sustainable dividends and long-standing stability.
📊 Overview
| Metric | Value |
|---|---|
| Sector | Utilities |
| Dividend yield | 2.93% |
| Current dividend per share | $2.43 |
| Dividend history | 42 years |
| Last cut or suspension | 2000 |
📈 Dividend History
With a storied dividend history of 42 years, Sempra showcases a commitment to shareholder returns. Historical trends shed light on financial resilience and investor confidence. Investors closely track these payouts as indicators of corporate health.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 2.58 |
| 2024 | 2.48 |
| 2023 | 2.38 |
| 2022 | 2.29 |
| 2021 | 2.20 |
📈 Dividend Growth
Sempra's dividend growth over the years is a testament to strategic fiscal management. Dividend growth measures a company's increasing profitability and commitment to returning capital to shareholders.
| Time | Growth |
|---|---|
| 3 years | 4.07% |
| 5 years | 5.09% |
The average dividend growth is 5.09% over 5 years. This shows moderate but steady dividend growth.
💡 Payout Ratio
Understanding payout ratios is critical to assessing a company's dividend sustainability. Ratios based on EPS and Free Cash Flow reveal how well earnings and cash flows cover dividends.
| Key figure | Ratio |
|---|---|
| EPS-based | 73.56% |
| Free cash flow-based | -32.36% |
The EPS-based payout ratio of 73.56% indicates a relatively high utilization of earnings for dividends, warranting close attention. The negative FCF-based ratio signifies challenges in free cash flow generation, spotlighting potential sustainability issues.
🔬 Cashflow & Capital Efficiency
Cash flow analysis reveals insights into operational efficiency and financial health. Key metrics evaluate liquidity, capital utilization, and overall cash management.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | -5.95% | -4.63% | -8.65% |
| Earnings Yield | 5.15% | 6.53% | 4.39% |
| CAPEX to Operating Cash Flow | 1.67 | 1.35 | 4.69 |
| Stock-based Compensation to Revenue | 0.66% | 0.51% | 0.46% |
| Free Cash Flow / Operating Cash Flow Ratio | -67.41% | -35.04% | -369.09% |
Sempra's negative free cash flow yields indicate financial challenges, despite stable earnings yields. CAPEX is critical in assessing investment cycles, and the negative cash flow ratios suggest potential liquidity bottlenecks.
📊 Balance Sheet & Leverage Analysis
The balance sheet assessment encompasses leverage and liquidity metrics, crucial for evaluating financial stability and operational resilience.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.15 | 1.08 | 1.07 |
| Debt-to-Assets | 0.37 | 0.36 | 0.37 |
| Debt-to-Capital | 0.53 | 0.52 | 0.52 |
| Net Debt to EBITDA | 5.86 | 5.04 | 6.46 |
| Current Ratio | 0.54 | 0.54 | 0.60 |
| Quick Ratio | 0.49 | 0.49 | 0.56 |
| Financial Leverage | 3.08 | 3.04 | 2.90 |
Sempra's leverage ratios indicate a high reliance on debt, with consistent debt-to-equity and financial leverage figures. The current and quick ratios highlight liquidity challenges, necessary for addressing short-term obligations.
🗣️ Fundamental Strength & Profitability
Assessing profitability indicators aides in evaluating operational effectiveness and potential financial growth opportunities for Sempra.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 9.16% | 10.72% | 7.88% |
| Return on Assets | 2.98% | 3.53% | 2.72% |
| Return on Invested Capital | 2.93% | 3.36% | 3.88% |
| Net Margin | 22.09% | 19.46% | 13.75% |
| EBIT Margin | 26.34% | 24.61% | 15.42% |
| EBITDA Margin | 45.15% | 38.70% | 28.40% |
| Gross Margin | 27.20% | 23.71% | 26.75% |
| R&D to Revenue | 0% | 0% | 0% |
Sempra's profitability margins manifest solid operational effectiveness, with improving net and EBIT margins. However, zero R&D expenditure could limit future innovation and growth potential.
✅ Dividend Scoring System
| Criteria | Score | Score Bar |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 5 | |
| Dividend growth | 4 | |
| Payout ratio | 3 | |
| Financial stability | 3 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 2 | |
| Balance Sheet Quality | 3 |
Total Score: 29/40
🗣️ Rating
Sempra exhibits a robust dividend history, supported by moderate but stable dividend growth and satisfactory profitability margins. However, high payout and leverage ratios highlight the importance of cautious monitoring. Overall, Sempra stands as a reliable dividend payer with a balanced risk-reward proposition for investors seeking income stability in the utilities sector.