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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Sempra Energy (XNYS:SRE) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SRE
Name:
SEMPRA ENERGY (XNYS:SRE)
Sector:
- 1703000.00K
Industry:
Utilities�Diversified
CEO:
Mr. Jeffrey Martin
Total Employees:
15,390
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -126.45% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF SEMPRA ENERGY(SRE) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND UTILITIES�DIVERSIFIED INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
166.8
One Month Price Target:
$167.43
Six Month Price Target :
$170.57
Likely Price in One Year's Time:
Ticker:
$174.34
Likely Trading Range Today Under (Normal Volatility)
$166.28
Price Upper limit ($) :
$167.45
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$159.8
This week:
$151.14
This month :
$135.48
Other Primary facts
Market Cap:
52.75B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
314.31M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
11.36%
-17.12%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$199.30
$184.38
$134.30
$149.22
Medium risk (<10%) entry points
Buy Call
Sell Call
$179.53
Buy Put:
Sell Put:
$176.34
$154.03
$157.26
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SRE
Sharpe Ratio:
1.43%
Comparison:
SRE, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -16.88% lower than the industry
& is -37.48% lower than the market/S&P 500 average
Average Returns/Yield of
SRE
Daily returns:
0.04%
Weekly returns:
0.19%
Monthly returns:
0.76%
Yearly returns:
11.80%
Comparison of returns:
Average annual returns/yield (last 3 years) is -22.23% below industry average
Classification:
SRE, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.16
Statistical test of Returns:
SRE has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.06%
Weekly Volatility:
4.61%
Monthly Volatility:
9.23%
Yearly Volatility:
31.96%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.40%
Volatility in last five trading days has been -31.93% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.20%
Weekly VaR:
-9.39%
Monthly VaR:
-18.78%
How Much Can the price of
SRE
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-65.05%
This translates to price declining to:
$139.83
This translates to price declining to:
$58.30
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
SRE is a 32.53% riskier investment compared to the market/S&P 500 & is 13.54% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -8.09% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SRE
Beta in relation to market/S&P 500--0.67
Expected beta in 1 year's time:
0.594
Expected beta in 3 year's time:
0.84
Unlevered (debt free) Beta:
-2.263
Beta in relation to Nasdaq (XNAS):
0.561
Beta in relation to all global stocks::
0.756
Beta Comparison & Analysis
Beta of competitors/peers::
0.528
Beta is 27.42% higher than peers
Average Industry Beta:
0.572
Beta is 17.66% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.014
Alpha is -70.01% below industry average alpha yield
Alpha is 90% compared to market & is healthy
Analysis of Cost of Capital of
SRE
Equity cost of capital:
0.078
Equity cost of capital is 9.79% above industry mean WACC
Unlevered (without debt) cost of capital:
-26.09%
Before-tax cost of debt:
21.57%
After-tax cost of debt:
17.04%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
17.04%
WACC is 44.04% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$42.69
Revenue growth rate per share of (3Y):
9.08
Annual revenue growth rate is -178.23% below industry average
EPS:
$3.16
Expected Annual growth rate of EPS (3Y):
-18.47%
Expected future EPS growth rate is -790.09% lower than the Utilities�Diversified industry
Free cash flow (FCF) per share:
-
Balance sheet equity growth per share: 27.16%
Equity growth rate per share is 1848.52% higher than the industry
Debt per share
$17.40
EBITDA per share
$13.16
Valuation Analysis Today of
SRE
P/E Ratio:
46.86
P/E Ratio of Competitors/Peers:
39.8
P/E ratio is 17.74% higher than main peers & is -34.49% lower than the industry
Stock price/value with industry average P/E ratio: $226.03
SRE is -26.20% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $93.20
Present value of the expected future dividends only: $77.72
P/S (Price to Sales ratio):
3.91
Price to sales ratio is 29.95% above the industry mean
P/B (Price to book value ratio):
9.08
-
-
Net income growth rate (3Y):
7.94%
Net income growth rate is -124.92% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 32.31%
Dividend yeild: 2.66%
Previous Dividend: $1.15
Previous adjusted dividend: $1.15
Previous Dividend: $4.45
Expected next dividend best case: $1.19
Expected next dividend worst case: $1.10
Average dividend payment (long-term): $1.07
Average dividend increase/decrease (growth rate) % per period: 1.93%
Expected next dividend payment date: 14/07/2022
Expected next dividend record date: 23/06/2022
Expected next dividend declaration date: 26/05/2022
Previous dividend payment date: 15/04/2022
Previous dividend record date: 25/03/2022
Previous dividend declaration date: 25/02/2022
Dividend History:
2022-03-24--$1.15
2021-09-23--$1.10
2021-03-24--$1.10
2021-12-22--$1.10
2021-07-06--$1.10
2020-12-17--$1.05
Dividend growth rate is -35.68% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
94.65%
Net debt to equity ratio:
51.25%
Debt to assets ratio:
7.30%
Net debt to assets ratio:
3.95%
Debt-to-asset ratio is -89.04% below industry average
Ability to repay debt:
Interest coverage ratio:
3.5
Interest coverage ratio is 13.72% more than industry average
Looking forward:
Debt growth rate:
1.81%
Annual debt growth is -98% lower than industry average debt growth rate
Debt repayment rate in last quarter: 16.08%
Analysis of Key Statistics
Correlation of price movement with the market:
0.649
Statistical significance of correlation:
SRE has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.609
Stock price is 6.62% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.609
Correlation of price movement with Nasdaq (^IXIC):
0.047
Covariance of price movement with the market:
0.056
Kurtosis
15.545
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-0.91
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
SRE
Gross Profit Margin Ratio:
204%
Operating Profit Margin Ratio:
13.99%
Operating profit margin is 99.19% higher than the industry
Net Profit Margin Ratio:
204%
Effective Tax Rate:
237.07%
Effective tax rate is 634.44% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
18.69%
Return on equity (ROE) is 134.37% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
1.44%
Return on assets (ROA) is -32.75% lower than the industry
Financial Leverage:
1.1x
Current Ratio:
1.65
Current ratio is -59.89% below industry average
Cash Conversion Cycle (days):
-32.2
Cash conversion cycle is -142.03% below industry average
The remaining useful life of property plant & equipment is: 3.8 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
871.9K
Each employee generates -2% less revenue than industry average revenue per employee
EBITDA generated per employee:
268.8K
Each employee generates 26% more EBITDA than industry average revenue per employee
Profit generated per employee:
70.2K
Each employee generates 44% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 110.7K
Each employee generates 581% more free cash flow than industry average revenue per employee
Assets/Capital per employee
4.4M
Each employee generates 581% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
SRE
AMERICAN ELECTRIC POWER COMPANY, INC. (XNAS:AEP)
NATIONAL GRID PLC (XNYS:NGG)
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED (XNYS:PEG)
Eversource Energy (XNYS:ES)
WEC ENERGY GROUP, INC. (XNYS:WEC)
CONSOLIDATED EDISON, INC. (XNYS:ED)
PG&E CORPORATION (XNYS:PCG)
DOMINION ENERGY SRS A UNT (XNYS:DCUE)
EDISON INTERNATIONAL (XNYS:EIX)
Current Analyst Ratings
Strong buy�21%
Buy�13%
Hold�13%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
13.42B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
6.33B
7.09B
-
-
-
-
1.86B
1.86B
80.00M
1.18B
1.60B
4.14B
1.88B
1.08B
116.00M
275.00M
1.08B
Statement of Cash Flow
Date:
Period:
187.00M
Differed Income Tax :
-
Stock Based Compensation :
-
Change in Working Capital :
48.00M
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
- 187000.00K
Net Cash Provided by Operating Activities:
705.00M
Investments in PP&E:
- 1204000.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
2.52B
-
2.52B
2.00B
352.00M
1.63B
6.50B
45.20B
1.60B
363.00M
1.67B
148.00M
19.44B
68.42B
-
74.92B
551.00M
12.00M
-
13.00M
3.36B
3.93B
5.47B
58.14B
65.21B
-
69.15B
1.67B
4.12B
- 30000.0K
22.00M
March 31, 2022 at 6:00:00 AM
7.72B
5.78B
74.92B
-
5.48B
3.0B
-
- 86000.00K
- 1290000.00K
- 1048000.00K
3.00M
- 226000.00K
- 349000.00K
3.26B
1.64B
-
1.96B
2.54B
581.00M
705.00M
- 2408000.00K
- 1703000.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
SRE
2023
2024
2025
2026
2027
$164.77
$172.23
$180.01
$188.15
$196.66