Sempra

ticker: SRE step: 01 generated: 2026-05-12 source: quick-research

Sempra (SRE) — Business Overview

Business Description

Sempra is a leading North American energy infrastructure company with three core segments: two regulated California utilities (SDG&E and SoCalGas), a majority-owned Texas electric transmission and distribution utility (Oncor through Sempra Texas), and an energy infrastructure and LNG platform (Sempra Infrastructure). The company is in a multi-year transition — simplifying its portfolio by monetizing Sempra Infrastructure (sold a 45% stake for $10B in 2025/2026) to concentrate capital on regulated U.S. utility growth. The $65B capital plan (2026–2030, a company record and 17% increase from the prior plan) is over 90% focused on regulated utility investment in Texas and California, with LNG project development at ECA (Mexico) and Port Arthur (Texas) as the key infrastructure catalyst.

Revenue Model

Sempra generates earnings through three primary streams: (1) SDG&E (San Diego Gas & Electric): regulated electric and gas utility serving 3.7M customers in San Diego and southern Orange County; earns allowed returns on rate base set by CPUC (California Public Utilities Commission); (2) SoCalGas (Southern California Gas Company): largest natural gas distribution utility in the U.S. by customer count, serving 21M customers in Southern California; CPUC-regulated; (3) Sempra Texas (Oncor): electric transmission and distribution utility serving ~4M metered customers in Texas; PUCT-regulated; Oncor rate base growing ~10%+ annually driven by Texas population and data center load growth; (4) Sempra Infrastructure: LNG export (ECA Phase 1, Port Arthur Phase 2), renewables, and Mexico gas distribution — partially monetized via 45% stake sale.

Products & Services

• SDG&E: Electric and gas service to San Diego region; ~$5.5B rate base; grid modernization, wildfire mitigation
• SoCalGas: Natural gas distribution to 21M SoCal customers; $22B+ rate base; pipeline safety modernization; hydrogen blending programs
• Oncor (via Sempra Texas): Electric T&D in Texas; ~$26B rate base growing 10%+ annually; serves Dallas/Fort Worth metro and Texas growth corridors
• ECA LNG Phase 1 (Energía Costa Azul): Mexico Pacific Coast LNG export facility; 3 Mtpa capacity; first LNG summer 2026
• Port Arthur LNG Phase 2: Texas Gulf Coast export facility; ~13 Mtpa; FID reached; under development
• Cimarron Wind: Wind power project; commercial operations declared 2025

Customer Base & Go-to-Market

Sempra's utilities serve regulated monopoly service territories: SDG&E in San Diego, SoCalGas across Southern California, and Oncor across 88,000+ square miles of Texas (heavily concentrated in Dallas-Fort Worth, one of the fastest-growing metro areas in the U.S.). Earnings are largely determined by regulatory process (rate cases), not market competition. LNG revenue comes from long-term offtake contracts with creditworthy counterparties (Asian utilities, European energy companies).

Competitive Position

Sempra holds natural monopoly positions in its utility service territories — no customer has a choice of electric or gas distribution provider. The moat is regulatory, geographic, and capital-intensive (competitors cannot easily replicate 100+ years of utility infrastructure). The key differentiator vs. other utilities is the Texas exposure (Oncor) — Texas has no electric utility rate caps and strong population/industrial/data center growth, allowing Oncor to grow rate base at 10%+ annually vs. 5–7% for most regulated utilities. The LNG infrastructure provides energy security value that drives long-term contracts with international buyers.

Key Facts

• Founded: 1996 (merger of Pacific Enterprises and Enova Corporation)
• Headquarters: San Diego, California
• Employees: ~17,500
• Exchange: NYSE
• Sector / Industry: Utilities / Multi-Utilities
• Market Cap: ~$48–52B

ticker: SRE step: 04 generated: 2026-05-12 source: quick-research

Sempra (SRE) — Financial Snapshot

Income Statement Summary

Revenue decline reflects LNG-related gains in FY2022-2023, commodity price normalization, and business simplification. Adjusted EPS from operations is the most comparable metric for regulated utility performance.

Cash Flow & Balance Sheet (FY2024)

Regulated utilities are capital-intensive by nature; FCF after capex is intentionally low as capital is continuously reinvested in rate base to earn regulated returns. Dividends are funded by earnings, not FCF.

Key Ratios (approximate, FY2024)

• P/E (adj.): ~19–21x | Dividend Yield: ~3.5%
• EV/EBITDA: ~13–15x | Rate Base Growth: ~8–10% annually (Oncor-driven)
• Adj. EPS Growth (FY2023→FY2024): ~+1% | Long-term guided growth: 7–9% annually

Growth Profile

Sempra's near-term adj. EPS growth is modest (~1% in FY2024) as it absorbs infrastructure investment costs ahead of Oncor rate base earnings recognition and LNG construction spend. The long-term outlook is stronger: Oncor's rate base is growing at 10%+ annually (driven by Texas population boom, data center load, and industrial growth), and management has guided 7–9% long-term EPS CAGR. The $65B capital plan (2026–2030) is 90%+ in regulated utilities, meaning most capital will earn predictable regulatory returns. The sale of 45% of Sempra Infrastructure for $10B (implying a $22B enterprise value) validates LNG asset value and provides balance sheet flexibility.

Forward Estimates

• FY2025: Adj. EPS guidance $4.30–$4.70 (step-down from FY2024 $4.65 due to LNG construction costs and timing)
• FY2026: Adj. EPS guidance $4.80–$5.30 (recovery as Oncor earnings ramp and ECA LNG Phase 1 comes online)
• Long-term: 7–9% EPS CAGR anchored in Oncor rate base growth and California utility investment
• Dividend: $2.48/share annualized (~3.5% yield); 23+ consecutive years of dividend increases