Pim van Vliet's Multi-Factor Investor Model: SEMPRA (SRE) Performance Analysis

Sempra (SRE) is a large-cap growth stock in the Electric Utilities industry. According to Validea's Multi-Factor Investor model, SRE has a rating of 50% based on the strategy of Pim van Vliet, which seeks low volatility stocks with strong momentum and high net payout yields. SRE passes the low volatility and standard deviation tests, but fails the net payout yield test.

Sempra Energy (SRE) reported its second quarter 2025 earnings on August 7, 2025, with adjusted earnings per share (EPS) of $0.89, matching the prior period [2]. The company affirmed its full-year 2025 EPS guidance range of $4.30 to $4.70 and provided a 2026 EPS guidance of $4.80 to $5.30. Despite the stable EPS, revenue was down 0.4% compared to the same quarter last year.

Institutional investors have shown strong interest in SRE, with 89.65% of the stock being held by institutional investors and hedge funds. Citigroup Inc. reduced its stake by 21.5%, selling 685,343 shares in the first quarter, but other investors like Cerity Partners LLC, Bank of Hawaii, and Bessemer Group Inc. increased their positions [1]. This indicates a mix of investor sentiment, with some reducing their stakes while others are increasing their holdings.

Analysts have mixed opinions on SRE. While some analysts have raised their price targets, others have maintained their ratings. Barclays, BMO Capital Markets, and Morgan Stanley have increased their target prices, while Citigroup and Jefferies Financial Group have maintained their ratings. The average rating is "Moderate Buy" with an average target price of $81.58 [1].

SRE's capital plan for 2025 includes $13 billion, with over $10 billion allocated for US utilities. The company's Oncor subsidiary has a $36 billion five-year capital plan. SRE has also made progress on major construction projects, including ECA LNG Phase 1, Cimarron Wind, and Port Arthur LNG Phase 1, which are expected to drive future cash flow growth [2].

Despite these positive developments, GuruFocus has detected 8 warning signs with SRE. The company's debt-to-equity ratio is 0.91, and its current ratio is 0.48, indicating a relatively high level of debt and low liquidity [1]. Additionally, the stock's price-to-earnings ratio is 19.74, which is slightly above the industry average.

In conclusion, SRE's Q2 2025 earnings report shows mixed results, with stable EPS but declining revenue. The stock has strong institutional interest and a mixed analyst sentiment. Investors should consider these factors when evaluating SRE as a potential investment.

References:
[1] https://www.marketbeat.com/instant-alerts/filing-sempra-energy-nysesre-shares-sold-by-citigroup-inc-2025-08-09/
[2] https://finance.yahoo.com/news/sempra-sre-q2-2025-earnings-072957966.html