Sempra (SRE) Stock Analysis

Sempra’s primary competitive advantage lies in its scale and regulatory positioning in two of the largest U.S. energy markets—California and Texas. Its utility subsidiaries, San Diego Gas & Electric (SDG&E) and Southern California Gas (SoCalGas), serve a combined 25 million consumers, providing stable, regulated cash flows. In Texas, Sempra’s 80.25% stake in Oncor gives it exposure to one of the fastest-growing electricity markets, with Oncor serving over 13 million Texans and adding nearly 20,000 new premises in Q2 2025 alone.

Sempra’s infrastructure arm is differentiated by its dual-basin LNG export strategy, with major projects on both the Gulf and Pacific coasts. Long-term contracts with creditworthy counterparties underpin cash flow visibility, reducing commodity price risk—a key distinction from merchant peers like Cheniere.

Relative to rivals such as NextEra and Dominion, Sempra’s capital allocation is more heavily weighted toward regulated transmission and distribution (over 90% of its $48 billion capital plan), which historically delivers higher risk-adjusted returns and less earnings volatility. Its regulatory relationships are constructive: recent rate cases in California and Texas have supported multi-year investment plans and allowed for timely cost recovery.

Sempra’s culture emphasizes operational excellence and risk management, evidenced by industry-leading wildfire mitigation at SDG&E and a track record of disciplined capital deployment. This focus has contributed to above-peer dividend growth and total shareholder return over the past decade.