Updated 3/26
Sempra isn’t a household name for most people, but for dividend investors, it’s a name worth knowing. Based in sunny San Diego, this company isn’t chasing headlines—it’s building the infrastructure that powers lives. Through regulated utilities in California and Texas and a growing footprint in energy infrastructure (including LNG exports), Sempra has become a dependable name in the energy sector. It’s not flashy, but it delivers, especially for those focused on consistent income.
Recent Events
The past year hasn’t been particularly kind to Sempra’s stock price. Shares have slipped around 1.5% over the last 12 months, even as the broader market marched higher. At one point in August, SRE was trading close to $96, but it’s now hovering just above $70. That decline has more to do with broader market dynamics—especially rising interest rates—than with any company-specific problems.
In fact, the recent bounce of over 2% in a single day suggests that investors might be warming back up to the stock, especially with its dividend looking as solid as ever.
Key Dividend Metrics
📈 Forward Dividend Yield: 3.65%
💰 Annual Dividend Payout: $2.58
🧮 Payout Ratio: 56.11%
📅 Next Dividend Payment: April 15, 2025
🚫 Ex-Dividend Date: March 20, 2025
📊 5-Year Average Yield: 3.15%
🔁 Last Stock Split: 2-for-1 in August 2023
Dividend Overview
Right now, Sempra’s dividend yield stands noticeably above its five-year average. That’s not because the company slashed its dividend—it’s because the stock price has dipped. For income investors, that’s the silver lining: a stable payout at a better yield.
The annual payout of $2.58 per share is not only reliable, it’s well supported by Sempra’s underlying earnings and cash flow. A payout ratio around 56% strikes a healthy balance between rewarding shareholders and keeping plenty of earnings available for reinvestment and debt management.
Dividend Growth and Safety
When it comes to dividend reliability, Sempra checks the box. While it doesn’t carry the decades-long dividend growth record of some blue-chip aristocrats, it has shown a steady hand. The company has made it clear over the years that returning capital to shareholders is a priority.
Even with a recent decline in quarterly earnings, the dividend appears to be on solid ground. Operating cash flow for the trailing twelve months came in at nearly $5 billion—plenty to cover the dividend outflow. And with a payout ratio still comfortably below 60%, there’s room to maneuver even if earnings remain under pressure in the near term.
Utilities tend to be built for consistency, and Sempra’s cash-generating model supports that tradition. The nature of its business—regulated utility services and long-term infrastructure assets—helps provide predictable revenue, which is the backbone of dividend dependability.
Chart Analysis
Current Phase in the Market Cycle
Looking at the chart of Sempra (SRE), the structure is clearly showing a transition into the markdown phase of the Wyckoff cycle. The stock experienced a long and steady markup through mid-2023 into early 2024, where it made a series of higher highs and higher lows. That gradual rise was supported by the 50-day moving average holding well above the 200-day, suggesting sustained upward momentum.
But by late January 2025, that structure broke down. The 50-day moving average crossed below the 200-day—classic death cross territory—confirming that momentum has flipped. This crossover often marks the end of distribution and the beginning of markdown. Price action since then has reflected a breakdown from the $85-$95 range into the high $60s, where it now appears to be settling into a sideways churn. This kind of move typically follows distribution and indicates markdown is underway.
Volume and Participation
Volume behavior during this transition adds more color to the story. Volume spiked sharply on the initial breakdown in late February, with that large red candle cutting through previous support like butter. That kind of volume spike on a steep move down is often an indicator of supply overwhelming demand—institutions stepping back or distributing their positions en masse.
What’s also telling is that volume hasn’t rebounded meaningfully since. The follow-through volume in March has been light, mostly below average, suggesting a lack of aggressive buying interest at current levels. The sharp contrast between the big sell candle and the muted volume afterward is a sign that the stock may still be in a bearish phase without strong accumulation just yet.
RSI and Momentum
The Relative Strength Index (RSI) has been hovering in a weak zone. For much of the past month, RSI has sat near or below 30, reflecting oversold conditions. There was a quick blip above 30 in mid-March, but it failed to gain momentum, showing weak follow-through from buyers.
This extended stay in oversold territory often confirms bearish control. While short-term relief rallies can happen from here, RSI behavior shows no real strength building under the surface. It’s still leaning heavily toward downside momentum, which aligns with the overall price trend.
Price Structure and Key Levels
SRE topped out in the $95 area before rolling over. The last significant support level was around $82, which the stock sliced through in February. Since then, $70 has acted as a temporary floor, but the recent candles aren’t showing conviction. Wicks are modest and the bodies of the candles are small—this kind of low-energy price action tends to show indecision, not accumulation.
We’re not seeing strong bullish candles with long lower wicks or wide range bodies that would suggest smart money stepping in to absorb supply. Instead, recent price action has just drifted sideways, lacking either conviction or volume. This flat action near recent lows is often part of the markdown process—a pause before another leg down or a longer basing period.
Last 5 Candles Analysis
Over the most recent five sessions, the candles have been relatively narrow, trading in a tight range around the $69–$71 zone. Most of them show short upper wicks and small real bodies, indicating mild selling pressure and very little buying conviction. None of the candles signal aggressive demand stepping in.
Importantly, none of the daily candles show strong bullish reversals. There’s no hammer or engulfing pattern to hint at a short-term bottom. Instead, we’re looking at a cluster of indecision with low volume, which tends to favor continuation of the prevailing trend—in this case, down.
From the moving averages to volume patterns to momentum indicators, the chart is painting a picture of continued weakness with no strong signs of reversal just yet.
Analyst Ratings
📈 Sempra (SRE) has seen a mix of analyst rating changes recently, reflecting a shift in sentiment driven by both macroeconomic factors and company-specific updates.
✅ Morgan Stanley reiterated its “Overweight” rating and nudged the price target up from $85 to $86. Their outlook remains positive, citing Sempra’s steady infrastructure investments and potential long-term value, especially in its regulated utility and LNG segments.
⚠️ Argus, on the other hand, downgraded the stock from “Buy” to “Hold.” The rationale behind the shift centers on regulatory uncertainties and rising operating costs, which could pressure margins over the next few quarters.
🔻 BMO Capital also revised their target, trimming it from $92 to $78 while keeping an “Outperform” rating. The downgrade in price expectation reflects concerns about capital expenditure increases and the potential for equity dilution to fund future projects.
🔄 Jefferies lowered its rating from “Buy” to “Hold” and cut the price target from $96 to $77. The firm pointed to a miss in earnings per share and a downward revision in Sempra’s 2025 guidance as key reasons for the more cautious stance.
⚖️ Barclays adjusted its rating from “Overweight” to “Equal Weight,” decreasing its target from $95 to $72. Analysts there are watching how Sempra navigates the higher cost environment and potential rate case headwinds in California.
💬 Goldman Sachs moved Sempra to “Neutral” with a revised target of $76. They flagged the recent earnings reset for 2025 as unexpected, making the risk/reward profile less compelling in the near term.
🎯 As of the end of March 2025, the average analyst 12-month price target for SRE sits around $82.38. Price expectations range from a low of $72 to a high of $95. That average implies about 16% upside from the current trading level near $70.76.
🔍 The overall consensus skews toward a “Buy” rating, though a cautious tone is emerging among some analysts due to cost pressures and regulatory overhang. The mix of upgrades and downgrades highlights the balancing act between Sempra’s stable income profile and the evolving risks in its operating environment.
Earnings Report Summary
Mixed Results for the Quarter
Sempra’s most recent earnings release gave investors a lot to unpack. For the fourth quarter of 2024, the company brought in $665 million in net income, which came out to $1.04 per share on a GAAP basis. That’s a bit lower than the $737 million, or $1.13 per share, they posted in the same quarter a year ago. So, from a pure bottom-line perspective, there was a bit of a step back.
But when you strip out the one-time charges and look at the adjusted numbers, things look a little better. Adjusted earnings came in at $960 million, or $1.50 per share, up from $719 million, or $1.13 per share, the year before. So even though the headline GAAP number dipped, the core operating performance actually improved.
Revenue Came Up Short
Revenue for the quarter landed at $3.76 billion, which didn’t quite meet expectations. That miss wasn’t entirely out of left field—there’ve been ongoing challenges with regulatory issues and higher operating costs, particularly in their California utility operations. These kinds of pressures are something that utilities like Sempra are always juggling, especially when investing in big infrastructure while managing regulatory caps.
Revised Guidance and Big Investment Plans
Looking ahead, the company lowered its earnings forecast for 2025. They now expect full-year earnings per share to come in somewhere between $4.30 and $4.70. That’s a bit softer than what many were hoping for, and it reflects a cautious view heading into a year that’s likely to see continued cost inflation and policy uncertainty.
That said, Sempra isn’t pulling back. They rolled out a $56 billion capital investment plan spanning 2025 through 2029. That’s a massive commitment to building out their utility and infrastructure footprint, especially in growth areas like Texas. Management is clearly betting on the long game—investing heavily in grid modernization, transmission projects, and clean energy infrastructure.
What Stood Out
Overall, the report was a mixed bag. The drop in GAAP earnings and the lower revenue raised some eyebrows, but the stronger adjusted earnings and long-term investment plans show that Sempra is still thinking big. They’re facing some near-term headwinds, no doubt, but they’re also laying down a foundation for where energy is heading over the next decade.
Financial Health and Stability
There are a few things to like when you look at Sempra’s balance sheet. Profit margins are healthy. The company brings in a 21.7% net profit margin and a 25.8% operating margin, which are strong for a utility. Return on equity is just under 10%, showing that management is putting shareholder capital to work efficiently.
Sempra also has a low beta, around 0.78, which reflects its relatively stable share price compared to the broader market. That’s another plus for income-focused investors who want less drama in their portfolio.
But there are some weak spots, too. The company’s total debt sits at a hefty $37 billion. With a debt-to-equity ratio close to 99%, Sempra isn’t exactly light on leverage. That’s not unusual for a utility—big infrastructure requires big capital—but it’s something to monitor, especially in a higher interest rate environment.
The current ratio, which measures short-term liquidity, is sitting at just 0.55. That suggests the company doesn’t have a lot of wiggle room with short-term obligations. Again, that’s common in this industry, but it highlights the importance of ongoing strong cash flow.
Valuation and Stock Performance
Sempra’s valuation has come down along with its stock price. Right now, it’s trading at a forward price-to-earnings ratio of 15.5—pretty reasonable for a company with stable earnings and a regulated business model. The trailing P/E is right around 16, also in line with sector peers.
The price-to-book ratio of 1.52 suggests investors are paying a modest premium for a solid utility with a dependable dividend. Given Sempra’s infrastructure assets and LNG exposure, that valuation seems justified for those willing to take the long view.
Meanwhile, Sempra’s stock is well off its moving averages. The 50-day sits up at $77.63, and the 200-day is even higher at $81.59. That divergence is a reminder that the stock has taken a hit, but it might also hint at potential upside if sentiment stabilizes.
Risks and Considerations
Sempra’s biggest challenge right now is the interest rate environment. Higher rates mean higher borrowing costs, and that hits utilities hard. For a company with over $37 billion in debt, refinancing at elevated rates can eat into earnings quickly.
There’s also regulatory risk. Much of Sempra’s business is governed by state and federal authorities, particularly in California, where policy changes can move quickly. Any shifts in rate structures or environmental mandates could impact profitability.
Then there’s the LNG business. While it’s a promising growth area, it also comes with its own set of risks—geopolitical uncertainty, energy price swings, and complex logistics all factor in.
And finally, the company’s liquidity position and short interest, while not alarming, are worth keeping an eye on. Sempra isn’t a high-risk stock, but it’s not immune from pressure either.
Final Thoughts
Sempra doesn’t try to be everything to everyone—and that’s part of its appeal. For dividend investors who value consistency over flash, it offers a solid yield, dependable payouts, and a steady business model. The recent dip in stock price has bumped up the yield and may present a more attractive entry point for those looking to lock in reliable income.
It’s a utility stock through and through: conservative, predictable, and built for the long haul. If you’re aiming for peace of mind and consistent dividends, Sempra continues to be a name worth watching.