Sempra Energy (NYSE: SRE) and National Grid Transco, PLC (NYSE:NGG) are both large-cap utilities companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, valuation, dividends, institutional ownership, profitability and risk.

Valuation and Earnings

This table compares Sempra Energy and National Grid Transco, PLC’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sempra Energy $10.97 billion 2.67 $3.71 billion $6.75 17.27
National Grid Transco, PLC $19.56 billion 2.21 $6.62 billion N/A N/A

National Grid Transco, PLC has higher revenue and earnings than Sempra Energy.

Volatility & Risk

Sempra Energy has a beta of 0.54, indicating that its stock price is 46% less volatile than the S&P 500. Comparatively, National Grid Transco, PLC has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500.

Dividends

Sempra Energy pays an annual dividend of $3.29 per share and has a dividend yield of 2.8%. National Grid Transco, PLC pays an annual dividend of $2.89 per share and has a dividend yield of 4.6%. Sempra Energy pays out 48.7% of its earnings in the form of a dividend. National Grid Transco, PLC has increased its dividend for 6 consecutive years. National Grid Transco, PLC is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

80.5% of Sempra Energy shares are held by institutional investors. Comparatively, 5.6% of National Grid Transco, PLC shares are held by institutional investors. 0.2% of Sempra Energy shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Sempra Energy and National Grid Transco, PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sempra Energy 15.51% 9.11% 2.84%
National Grid Transco, PLC N/A N/A N/A

Analyst Recommendations

This is a summary of recent ratings and price targets for Sempra Energy and National Grid Transco, PLC, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sempra Energy 0 2 4 0 2.67
National Grid Transco, PLC 2 6 7 0 2.33

Sempra Energy presently has a consensus price target of $121.60, suggesting a potential upside of 4.33%. National Grid Transco, PLC has a consensus price target of $69.00, suggesting a potential upside of 9.91%. Given National Grid Transco, PLC’s higher possible upside, analysts clearly believe National Grid Transco, PLC is more favorable than Sempra Energy.

Summary

Sempra Energy beats National Grid Transco, PLC on 8 of the 15 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.

National Grid Transco, PLC Company Profile

National Grid plc is an electricity and gas utility company focused on transmission and distribution activities in electricity and gas in both the United Kingdom and the United States. The Company’s segments include UK Electricity Transmission, which is engaged in high voltage electricity transmission networks in Great Britain; UK Gas Transmission, which is the gas transmission network in Great Britain and United Kingdom liquefied natural gas (LNG) storage activities; UK Gas Distribution, which includes approximately four of the eight regional networks of Great Britain’s gas distribution system, and US Regulated, which includes gas distribution networks, electricity distribution networks and high voltage electricity transmission networks in New York, and New England and electricity generation facilities in New York. Its other activities relate to non-regulated businesses and other commercial operations not included within the above segments.

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