Reviewing Sempra Energy (SRE) and Wec Acquisition (TEG)

Sempra Energy (NYSE: SRE) and Wec Acquisition (NYSE:TEG) are both mid-cap utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, institutional ownership, risk and valuation.

Insider and Institutional Ownership

80.6% of Sempra Energy shares are owned by institutional investors. 0.2% of Sempra Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Sempra Energy and Wec Acquisition’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sempra Energy $10.18 billion 2.86 $1.37 billion $4.51 23.51
Wec Acquisition N/A N/A N/A $3.29 21.16

Sempra Energy has higher revenue and earnings than Wec Acquisition. Wec Acquisition is trading at a lower price-to-earnings ratio than Sempra Energy, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Sempra Energy and Wec Acquisition’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sempra Energy 10.22% 8.81% 2.79%
Wec Acquisition 11.28% 15.70% 4.69%

Dividends

Sempra Energy pays an annual dividend of $3.29 per share and has a dividend yield of 3.1%. Wec Acquisition does not pay a dividend. Sempra Energy pays out 72.9% of its earnings in the form of a dividend. Sempra Energy has raised its dividend for 7 consecutive years.

Analyst Ratings

This is a summary of recent recommendations for Sempra Energy and Wec Acquisition, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sempra Energy 0 4 4 0 2.50
Wec Acquisition 0 0 0 0 N/A

Sempra Energy currently has a consensus target price of $121.63, suggesting a potential upside of 14.72%. Given Sempra Energy’s higher possible upside, research analysts plainly believe Sempra Energy is more favorable than Wec Acquisition.

Summary

Sempra Energy beats Wec Acquisition on 9 of the 13 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.

Wec Acquisition Company Profile

Integrys Energy Group, Inc. is an energy holding company, which provides regulated natural gas and electricity, non-regulated renewable energy, and compressed natural gas products and services. The Company operates through four segments: natural gas utility, electric utility, electric transmission investment, and holding company and other. The natural gas utility segment includes the operations of Minnesota Energy Resources Corporation, Michigan Gas Utilities Corporation, North Shore Gas Company, The Peoples Gas Light and Coke Company and Wisconsin Public Service Corporation (WPS). The electric utility segment includes the electric utility operations of WPS. The electric transmission investment segment includes its 34% interest in American Transmission Company LLC. The holding company and other segment include the operations of the Integrys Energy Group holding company, Integrys Transportation Fuels, LLC, WPS Power Development LLC and the Peoples Energy, LLC holding company.

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