Sempra Energy

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SRE : NYSE : Utilities
$113.78 | %
Today's Range: 112.93 - 113.92
Avg. Daily Volume: 1,252,200
07/22/16 - 4:02 PM ET

Financial Analysis


SEMPRA ENERGY's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, although the growth in net income underperformed the average competitor within the industry, the revenue growth did not. SEMPRA ENERGY has very weak liquidity. Currently, the Quick Ratio is 0.33 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity decreased from the same period a year ago, despite already having very weak liquidity to begin with. This would indicate deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 3.83% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)2622.02682.0
EBITDA ($mil)893.0957.0
EBIT ($mil)565.0654.0
Net Income ($mil)319.0437.0


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)399.0387.0
Total Assets ($mil)41835.039551.0
Total Debt ($mil)15218.014284.0
Equity ($mil)11966.011524.0


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin34.0635.68
EBITDA Margin34.0535.68
Operating Margin21.5524.38
Sales Turnover0.240.28
Return on Assets2.943.41
Return on Equity10.2811.72
Debt Q1 FY16 Q1 FY15
Current Ratio0.560.97
Debt/Capital0.560.55
Interest Expense168.0157.0
Interest Coverage3.364.17


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)249.0247.0
Div / share0.760.7
EPS1.271.74
Book value / share48.0646.66
Institutional Own % n/a n/a
Avg Daily Volume1222412.01396430.0

Valuation


BUY. The current P/E ratio indicates a premium compared to an average of 21.75 for the Multi-Utilities industry and a value on par with the S&P 500 average of 25.03. For additional comparison, its price-to-book ratio of 2.35 indicates a discount versus the S&P 500 average of 2.80 and a discount versus the industry average of 2.50. The current price-to-sales ratio is well above the S&P 500 average and above the industry average, indicating a premium. The valuation analysis reveals that, SEMPRA ENERGY seems to be trading at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
SRE 23.07 Peers 21.75   SRE 10.47 Peers 8.63

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

SRE is trading at a valuation on par with its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

SRE is trading at a premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
SRE 21.55 Peers 20.01   SRE NM Peers 2.07

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

SRE is trading at a premium to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

SRE's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
SRE 2.35 Peers 2.50   SRE -9.10 Peers -4.79

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

SRE is trading at a valuation on par with its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, SRE is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
SRE 2.77 Peers 2.59   SRE -6.88 Peers -3.56

Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

SRE is trading at a valuation on par with its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

SRE significantly trails its peers on the basis of sales growth

 

 

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