An In-depth Analysis of Sempra Energy's Dividend History, Yield, Growth, and Sustainability
Sempra Energy (SRE, Financial) has recently announced a dividend of $0.6 per share, payable on 2023-10-15, with the ex-dividend date set for 2023-09-26. As investors anticipate this upcoming payment, it's essential to examine the company's dividend history, yield, and growth rates. This article leverages data from GuruFocus to offer an in-depth analysis of Sempra Energy's dividend performance and its sustainability.
Company Overview: Sempra Energy
Sempra Energy serves one of the largest utility customer bases in the United States. The company distributes natural gas and electricity in Southern California and owns 80% of Oncor, a transmission and distribution business in Texas. SoCalGas and San Diego Gas & Electric distribute gas to more than 20 million customers, while Oncor serves over 10 million Texas customers. Sempra Infrastructure partners, of which Sempra holds a controlling ownership, owns and operates liquefied natural gas facilities in North America and infrastructure in Mexico.
Exploring Sempra Energy's Dividend History
Since 1984, Sempra Energy has maintained a consistent dividend payment record, with dividends currently distributed on a quarterly basis. Remarkably, the company has increased its dividend each year since 2000, earning it the status of a dividend achiever, a title given to companies that have increased their dividend annually for at least 23 consecutive years.
Understanding Sempra Energy's Dividend Yield and Growth
As of the present date, Sempra Energy boasts a 12-month trailing dividend yield of 3.28% and a 12-month forward dividend yield of 3.34%, indicating an expected increase in dividend payments over the next year.
Over the past three years, Sempra Energy's annual dividend growth rate was 5.80%. This rate increased to 6.90% per year over a five-year horizon. Over the past decade, Sempra Energy's annual dividends per share growth rate stands at 7.20%. Based on Sempra Energy's dividend yield and five-year growth rate, the 5-year yield on cost of Sempra Energy stock as of today is approximately 4.58%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
The dividend payout ratio is a crucial metric in evaluating the sustainability of a company's dividend. As of 2023-06-30, Sempra Energy's dividend payout ratio is 0.59, indicating that the company retains a significant portion of its earnings for future growth and unexpected downturns.
With a profitability rank of 7 out of 10 as of 2023-06-30, Sempra Energy shows promising profitability prospects. The company has reported positive net income each year over the past decade, further solidifying its high profitability.
Growth Metrics: A Peek into the Future
Sempra Energy's growth rank of 7 out of 10 suggests a good growth trajectory relative to its competitors. The company's revenue per share and 3-year revenue growth rate indicate a strong revenue model. Sempra Energy's revenue has increased by approximately 5.90% per year on average. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. Lastly, the company's 5-year EBITDA growth rate stands at 31.10%.
Concluding Thoughts
Considering Sempra Energy's consistent dividend payments, impressive growth rate, sustainable payout ratio, high profitability, and robust growth metrics, the company presents a compelling case for dividend investors. However, like any investment, it's crucial to conduct thorough research and consider the company's overall performance and market conditions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
