February 16, 2026 a 11:31 am
SRE: Dividend Analysis - Sempra
Sempra, a leading player in the utilities sector, presents a robust dividend profile characterized by a stable history and steady growth. With consistent dividends for over four decades, the company exudes reliability, making it a solid choice for income-focused investors. However, the negative free cash flow yield is a concern, hinting at challenges in cash generation which might affect future dividend capabilities.
Overview 📊
Sempra's consistent dividend distributions over 42 years highlight its commitment to returning value to shareholders. Operating in the Utilities sector, it boasts a respectable dividend yield of 2.90%. The current dividend per share stands at $2.43, with the company's last dividend cut or suspension occurring back in 2000.
| Attribute | Details |
|---|---|
| Sector | Utilities |
| Dividend yield | 2.90 % |
| Current dividend per share | 2.43 USD |
| Dividend history | 42 years |
| Last cut or suspension | 2000 |
Dividend History 📈
The company has demonstrated consistent dividend growth, which is a crucial factor for investors looking for reliable income streams. This history of stable payments is a testament to Sempra's resilient business model.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 2.58 |
| 2024 | 2.48 |
| 2023 | 2.38 |
| 2022 | 2.29 |
| 2021 | 2.20 |
Dividend Growth 📉
Steady growth in dividends enhances shareholder value and provides a hedge against inflation. Sempra's average dividend growth of 4.30% over the last five years indicates a healthy expansion pace.
| Time | Growth |
|---|---|
| 3 years | 4.05 % |
| 5 years | 4.30 % |
The average dividend growth is 4.30% over five years. This shows moderate but steady dividend growth, indicating positive financial health.
Payout Ratio ✅
Payout ratios are indispensable in assessing a company’s ability to sustain its dividends. An EPS-based payout ratio of 73.56% suggests high but manageable payouts, while a negative FCF-based ratio indicates potential liquidity concerns.
| Key figure ratio | Percentage |
|---|---|
| EPS-based | 73.56 % |
| Free cash flow-based | -32.36 % |
The high EPS-based payout ratio indicates that Sempra is distributing a large portion of its earnings, which could be concerning if earnings were to decline. The negative FCF payout ratio highlights potential challenges in covering dividends with generated cash.
Cashflow & Capital Efficiency ⚠️
Understanding the cash flow health and capital efficiency is crucial for long-term sustainability and investment returns.
| 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% |
The data emphasize challenges in free cash flow generation, suggesting a lower capital efficiency that could impact future cash distributions and investments.
Balance Sheet & Leverage Analysis 🗣️
Reviewing Sempra's leverage ratios provides insight into its financial structure and ability to meet obligations.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.15 | 1.08 | 1.07 |
| Debt-to-Assets | 37.28% | 35.65% | 36.80% |
| Debt-to-Capital | 53.43% | 51.99% | 51.59% |
| Net Debt to EBITDA | 5.86 | 5.04 | 6.46 |
| Current Ratio | 0.55 | 0.54 | 0.60 |
| Quick Ratio | 0.49 | 0.49 | 0.56 |
| Financial Leverage | 3.08 | 3.04 | 2.90 |
The leverage position highlights a significant dependency on debt, potentially increasing risk if interest rates rise or operating income falls.
Fundamental Strength & Profitability 📊
These metrics provide insight into operational efficiency and profitability potential.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 9.16% | 10.72% | 7.88% |
| Return on Assets | 2.98% | 3.53% | 2.72% |
| 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% |
| Research & Development to Revenue | 0% | 0% | 0% |
Profitability metrics suggest healthy margins but with a heavy reliance on operational efficiencies and precise financial management.
Price Development 🗣️
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 🗣️
In summary, Sempra presents as a potentially strong dividend candidate with a notable track record of stability and satisfactory growth. Though the high dependency on leverage and current cash flow issues may pose some risk, its consistent dividend history suggests resilience. Continued monitoring of free cash flow trends and leverage levels is recommended to ensure sustained dividend payouts in the future.