Contrasting Sempra Energy (NYSE:SRE) & Consolidated Edison (NYSE:ED)

Sempra Energy (NYSE:SRE – Get Free Report) and Consolidated Edison (NYSE:ED – Get Free Report) are both large-cap utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, risk and institutional ownership.

Profitability

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

Dividends

Sempra Energy pays an annual dividend of $2.63 per share and has a dividend yield of 3.4%. Consolidated Edison pays an annual dividend of $3.55 per share and has a dividend yield of 3.5%. Sempra Energy pays out 76.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Consolidated Edison pays out 58.3% of its earnings in the form of a dividend. Sempra Energy has increased its dividend for 22 consecutive years and Consolidated Edison has increased its dividend for 52 consecutive years. Consolidated Edison is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Sempra Energy and Consolidated Edison”s gross revenue, earnings per share (EPS) and valuation.

Consolidated Edison has higher revenue and earnings than Sempra Energy. Consolidated Edison 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 & Insider Ownership

89.7% of Sempra Energy shares are held by institutional investors. Comparatively, 66.3% of Consolidated Edison shares are held by institutional investors. 0.3% of Sempra Energy shares are held by company insiders. Comparatively, 0.2% of Consolidated Edison shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Sempra Energy and Consolidated Edison, as reported by MarketBeat.

Sempra Energy currently has a consensus target price of $101.69, indicating a potential upside of 32.33%. Consolidated Edison has a consensus target price of $108.67, indicating a potential upside of 5.65%. Given Sempra Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Sempra Energy is more favorable than Consolidated Edison.

Volatility and Risk

Sempra Energy has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500. Comparatively, Consolidated Edison has a beta of 0.27, meaning that its share price is 73% less volatile than the S&P 500.

Summary

Sempra Energy beats Consolidated Edison on 12 of the 18 factors compared between the two stocks.

About Sempra Energy

(Get Free Report)

Sempra operates as an energy infrastructure company in the United States and internationally. It operates through three segments: Sempra California, Sempra Texas Utilities, and Sempra Infrastructure. The Sempra California segment provides electric services; and natural gas services to San Diego County. As of December 31, 2023, it offered electric services to approximately 3.6 million population and natural gas services to approximately 3.3 million population that covers 4,100 square miles. This segment owns and operates a natural gas distribution, transmission, and storage system that supplies natural gas. As of December 31, 2023, it serves a population of 21 million covering an area of 24,000 square miles. The Sempra Texas Utilities segment engages in the regulated electricity transmission and distribution. As of December 31, 2023, its transmission system included 18,298 circuit miles of transmission lines; 1,257 transmission and distribution substations; interconnection to 173 third-party generation facilities totaling 54,277 MW; and distribution system included approximately 4.0 million points of delivery and consisted of 125,116 miles of overhead and underground lines. The Sempra Infrastructure segment develops, builds, operates, and invests in energy infrastructure to help enable the energy transition in North American markets and worldwide. The company was formerly known as Sempra Energy and changed its name to Sempra in May 2023. Sempra was incorporated in 1996 and is based in San Diego, California.

About Consolidated Edison

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Consolidated Edison, Inc., through its subsidiaries, engages in the regulated electric, gas, and steam delivery businesses in the United States. It offers electric services to approximately 3.7 million customers in New York City and Westchester County; gas to approximately 1.1 million customers in Manhattan, the Bronx, parts of Queens, and Westchester County; and steam to approximately 1,530 customers in parts of Manhattan. The company also supplies electricity to approximately 0.3 million customers in southeastern New York and northern New Jersey; and gas to approximately 0.2 million customers in southeastern New York. In addition, it operates 545 circuit miles of transmission lines; 15 transmission substations; 63 distribution substations; 90,051 in-service line transformers; 3,788 pole miles of overhead distribution lines; and 2,314 miles of underground distribution lines, as well as 4,363 miles of mains and 380,870 service lines for natural gas distribution. Further, the company invests in electric and gas transmission projects. It primarily sells electricity to industrial, commercial, residential, and government customers. Consolidated Edison, Inc. was founded in 1823 and is based in New York, New York.