SRE

Utilities

Sempra

Price Chart

Market Data

Financials

XBRL · SEC EDGAR

2010–2025(16yr)

Revenue

Net Income

Free CF

Metric	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$9.0B	$10.0B	$9.6B	$10.6B	$11.0B	$10.2B	$10.2B	$11.2B	$11.7B	$10.8B	$11.4B	$12.9B	$14.4B	$16.7B	$13.2B	$13.7B	+3.9%
Net Income	$739.0M	$1.3B	$859.0M	$1.0B	$1.2B	$1.3B	$1.4B	$256.0M	$1.1B	$2.4B	$4.1B	$1.3B	$2.1B	$3.1B	$2.9B	$1.8B	-35.8%
Net Margin	8.2%	13.3%	8.9%	9.5%	10.5%	13.2%	13.5%	2.3%	9.6%	21.8%	36.1%	10.3%	14.8%	18.4%	21.7%	13.4%	-8.3pp
Free Cash Flow	$92.0M	-$977.0M	-$938.0M	-$788.0M	-$962.0M	-$251.0M	-$1.9B	-$324.0M	-$337.0M	-$620.0M	-$2.1B	-$1.2B	-$4.2B	-$2.2B	-$3.3B	-$6.0B	-82.8%
FCF Margin	1.0%	-9.7%	-9.7%	-7.5%	-8.7%	-2.5%	-18.6%	-2.9%	-2.9%	-5.7%	-18.3%	-9.1%	-29.2%	-13.0%	-25.1%	-44.1%	-19.0pp
EPS (Diluted)	$2.98	$5.51	$3.48	$4.01	$4.63	$5.37	$5.46	$1.01	$3.42	$7.29	$12.88	$4.01	$6.62	$4.79	$4.42	$2.75	-37.8%

Total Debt$29.0B

Cash & Equiv.$29.0M

Net Debt$28.9B

4 min read

1. THE BIG PICTURE

Sempra is moving away from the traditional, slow-growth utility model to become a high-stakes infrastructure play centered on the two largest economies in the U.S. By raising its five-year capital plan to $65 billion and selling a $10 billion stake in its infrastructure arm to KKR, Sempra is aggressively betting that regulated utility growth in Texas and California, paired with global LNG demand, will outweigh its significant cash burn and regulatory liabilities (8-K).

2. WHERE THE RISKS HIT HARDEST

Sempra’s core strategy of using "stable cash flows" from regulated utilities to provide earnings visibility is threatened by "ring-fencing" measures in Texas (10-K Item 1, 10-K Item 1A). These regulations restrict Sempra’s ability to influence the management or pull cash from Oncor, even though Oncor is the primary driver of Sempra’s new $65 billion investment plan (8-K).

Furthermore, the geographic focus on California exposes Sempra to "inverse condemnation" liabilities. Under this legal standard, Sempra can be held liable for wildfire damages even without a finding of fault, a risk that directly threatens the financial stability of its Sempra California segment (10-K Item 1A). This creates a scenario where the very infrastructure meant to drive growth could become a source of unrecoverable costs that exceed insurance coverage.

3. WHAT THE NUMBERS SAY TOGETHER

While management highlights "strong financial results," the consolidated data reveals a business in a deep investment trough. Sempra’s free cash flow (FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders) margin of -39.8% is the lowest in its peer group, reflecting the massive capital intensity of its $65 billion plan (XBRL). This negative FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders is a structural reality of its current build-out phase, but it places immense pressure on Sempra to successfully execute its "capital recycling" strategy, such as the $10 billion sale of a stake in SI Partners to KKR (8-K).

Revenue growth of +3.9% lags significantly behind peers like Dominion (+14.2%) and Southern Company (+10.6%). This divergence suggests that Sempra’s current utility base is growing slowly while it waits for massive infrastructure projects—like the Port Arthur and Cameron LNG expansions—to come online. Short interest remains low at 1.7% of the float, indicating that despite a drop in quarterly GAAPGAAPGenerally Accepted Accounting Principles — the standard U.S. accounting rules all public companies must follow earnings from $1.04 to $0.54 per share, the market is not yet betting against Sempra’s long-term infrastructure pivot (8-K, Yahoo Finance).

4. IS IT WORTH IT AT THIS PRICE?

At 16.9x forward earnings, Sempra trades at a modest 7% discount to the peer median of 18.1x. This discount is justified by its bottom-tier revenue growth and the highest cash burn rate among its peers (XBRL).

At this multiple, the market is pricing in ~2.4% long-term growth (CAPM analysis). This appears credible and perhaps even cautious, given that Sempra’s 2030 outlook of $6.70 to $7.50 per share suggests a significant step up from its 2025 EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric of $2.75 (8-K). For this price to be "right," Sempra must successfully navigate the regulatory environments in California and Texas to ensure its $65 billion in planned spending is actually recovered through utility rates. If regulatory decisions or wildfire liabilities interfere with that recovery, the justified multiple would likely contract toward the 15.1x seen by Vistra.

5. WHAT WOULD CHANGE THIS VIEW?

Cautious if the $10 billion sale of the 45% stake in SI Partners to KKR fails to close by the third quarter of 2026, which would create a massive liquidity gap in the $65 billion capital plan (8-K).
Constructive if the FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin moves toward the peer median (currently -2.1% for Duke Energy), signaling that Sempra’s massive infrastructure investments have transitioned from the "spend" phase to the "generate" phase (XBRL).

6. BOTTOM LINE

Structural Advantage: Sempra’s dual-engine model combines a dominant regulated utility presence in high-growth U.S. markets with a massive, globally-linked LNG export platform.

Bottom Line: Sempra is a high-conviction bet on North American energy infrastructure that is currently fairly priced, provided investors can overlook temporary cash burn and significant wildfire liability.

Source: Synthesis · LLM Analysis

4 min read

1. Top 5 Material Risks

Subsidiary Dependency: Sempra is a holding company that relies on distributions from subsidiaries and equity method investees (such as Oncor and SI Partners) to pay dividends and meet debt obligations. These entities are separate legal entities that may be restricted by regulation or financial distress from making distributions to Sempra.
Capital Expenditure Execution: The five-year capital expenditures plan may not be completed as expected due to factors including the cost and availability of financing, economic conditions, regulatory decisions, and the cooperation of third parties.
Infrastructure and System Risks: Sempra’s facilities are subject to equipment failures, human error, and supply chain constraints. These risks are exacerbated by the need to maintain, upgrade, and operate complex systems, with costs that may not be recoverable in rates.
Severe Weather and Physical Threats: Sempra faces risks from extreme temperatures, wildfires, earthquakes, and physical attacks. Sempra may be liable for damages even without fault (e.g., inverse condemnation), and insurance may be insufficient or prohibitively expensive.
Cybersecurity and Technology: Sempra faces increasing threats from cyber-attacks, ransomware, and vulnerabilities in third-party systems. Sempra’s reliance on artificial intelligence and grid modernization increases the potential points of failure, which could lead to operational disruptions and regulatory fines.

2. Company-Specific Risks

Activist Shareholders: Sempra is subject to potential proxy solicitations or shareholder proposals that could divert management attention, increase costs, and threaten Sempra’s ability to use net operating loss (NOL) or tax credit carryforwards if an "ownership change" occurs.
Forward Sale Agreement Risks: Sempra’s ATM program includes forward sale agreements that may require physical settlement of shares upon events outside Sempra's control, potentially diluting earnings per share (EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric) and adversely affecting the market price of common stock.
Equity Dilution: Sempra’s substantial capital needs may necessitate the issuance of additional equity or convertible debt, which could materially dilute the voting rights and economic interests of existing common stockholders.
Counterparty Performance: Sempra’s businesses depend on the performance of partners and suppliers, including Mexican state-owned enterprises like PEMEX and the CFE. Defaults or payment delays from these counterparties can lead to provisions for expected credit losses and lower revenues.

3. Regulatory/Legal Risks

Franchise Challenges: SDG&E’s electric and natural gas franchise agreements are subject to legal challenges, and the City of San Diego is studying municipalization as an alternative. Loss of these franchises could require Sempra to cease operations or bypass impacted areas.
Mexican Regulatory Changes: Recent amendments to Mexico’s Constitution and 2025 Energy Laws have increased government control over the energy sector, creating novel challenges for Sempra Infrastructure’s development and operations.
Tariff Impacts: The U.S. Administration has imposed and threatened new tariffs on imported materials (steel, aluminum, power grid equipment) and goods from Mexico and Canada. These actions create uncertainty for construction costs and project profitability.
Privacy Regulations: Sempra’s California businesses are subject to the California Consumer Privacy Act and, beginning in 2027, new regulations governing the use of artificial intelligence in automated decision-making, which require cybersecurity audits and compliance certifications.

4. Financial Impact Map

Subsidiary Dependency → Cash Flows / Dividends → Ability to meet debt obligations and pay shareholder dividends. Capital Expenditure Execution → Capital Expenditures / Long-term Debt → Potential for cost overruns or inability to raise capital on reasonable terms. Severe Weather and Physical Threats → Operating Expenses / Regulatory Fines → Restoration costs, legal claims, and potential regulatory disallowances. Cybersecurity and Technology → Operating Expenses / Net Income → Costs of remediation, potential fines, and loss of revenue from operational disruptions. Counterparty Performance → Accounts Receivable / Revenues → Provisions for expected credit losses and reduced revenue from non-payment by counterparties like CFE.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
8-K	Feb 2026	—
10-K	Feb 2026	Dec 2025
10-Q	Nov 2025	Sep 2025
14A	Mar 2025	—