Sempra Energy (NYSE: SRE) and PPL Corporation (NYSE:PPL) are both large-cap utilities companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, analyst recommendations, profitability, dividends, institutional ownership and risk.
Valuation & Earnings
This table compares Sempra Energy and PPL Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Sempra Energy||$10.97 billion||2.75||$3.71 billion||$6.75||17.79|
|PPL Corporation||$7.40 billion||3.69||$4.04 billion||$2.39||16.67|
PPL Corporation has higher revenue, but lower earnings than Sempra Energy. PPL Corporation is trading at a lower price-to-earnings ratio than Sempra Energy, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
81.2% of Sempra Energy shares are owned by institutional investors. Comparatively, 71.0% of PPL Corporation shares are owned by institutional investors. 0.2% of Sempra Energy shares are owned by insiders. Comparatively, 0.4% of PPL Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Volatility and Risk
Sempra Energy has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500. Comparatively, PPL Corporation has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500.
Sempra Energy pays an annual dividend of $3.29 per share and has a dividend yield of 2.7%. PPL Corporation pays an annual dividend of $1.58 per share and has a dividend yield of 4.0%. Sempra Energy pays out 48.7% of its earnings in the form of a dividend. PPL Corporation pays out 66.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Sempra Energy has raised its dividend for 6 consecutive years and PPL Corporation has raised its dividend for 5 consecutive years.
This is a summary of current ratings for Sempra Energy and PPL Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Sempra Energy presently has a consensus price target of $121.60, indicating a potential upside of 1.28%. PPL Corporation has a consensus price target of $38.36, indicating a potential downside of 3.70%. Given Sempra Energy’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Sempra Energy is more favorable than PPL Corporation.
This table compares Sempra Energy and PPL Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Sempra Energy beats PPL Corporation on 10 of the 17 factors compared between the two stocks.
Sempra Energy Company Profile
Sempra Energy is a holding company. The Company’s principal operating units are Sempra Utilities, which includes its San Diego Gas & Electric Company (SDG&E), Southern California Gas Company (SoCalGas) and Sempra South American Utilities segments, and Sempra Infrastructure, which includes its Sempra Mexico, Sempra Renewables and Sempra LNG & Midstream segments. As of December 31, 2016, SDG&E’s service area covered 4,100 square miles. Sempra South American Utilities operates Chilquinta Energia, which serves customers in the region of Valparaiso in central Chile. As of December 31, 2016, SoCalGas had natural gas franchises with the 12 counties and the 223 cities in its service territory. Sempra LNG & Midstream owns land in Simpson County, Mississippi Hub. Sempra LNG & Midstream owns land in Port Arthur, Texas. Sempra Renewables has operations, investments or development projects in the various United States markets.
PPL Corporation Company Profile
PPL Corporation (PPL) is a utility holding company. Through its subsidiaries, PPL delivers electricity to customers in the United Kingdom, Pennsylvania, Kentucky, Virginia and Tennessee; delivers natural gas to customers in Kentucky, and generates electricity from power plants in Kentucky. PPL operates through U.K. Regulated Segment, Kentucky Regulated Segment and Pennsylvania Regulated Segment. The U.K. Regulated Segment consists of PPL Global, which includes PPL WPD Limited’s (WPD) regulated electricity distribution operations, the results of hedging the translation of WPD’s earnings from British pound sterling into United States dollars, and certain costs, such as the United States income taxes, administrative costs and allocated financing costs. Kentucky Regulated segment consists of the operations of Louisville Gas and Electric Company (LG&E) and KU Energy LLC (LKE). The Pennsylvania Regulated segment consists of PPL Electric Utilities Corporation (PPL Electric).
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