Sempra vs PG&E Which Is a Better Investment?

Sempra Energy and PG&E Corporation are two prominent players in the energy sector, each offering unique opportunities for investors. Sempra Energy is a diversified energy company with a focus on natural gas distribution and renewables, providing stable returns and a strong dividend yield. PG&E Corporation, on the other hand, has faced significant challenges in recent years due to its involvement in devastating wildfires and bankruptcy proceedings. Investors should carefully consider the potential risks and rewards when deciding between these two stocks.

Sempra or PG&E?

When comparing Sempra and PG&E, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Sempra and PG&E.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Sempra has a dividend yield of 2.66%, while PG&E has a dividend yield of 0.19%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Sempra reports a 5-year dividend growth of -0.06% year and a payout ratio of 55.75%. On the other hand, PG&E reports a 5-year dividend growth of 0.00% year and a payout ratio of 3.11%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Sempra P/E ratio at 19.19 and PG&E's P/E ratio at 16.47. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Sempra P/B ratio is 7.41 while PG&E's P/B ratio is 1.43.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Sempra has seen a 5-year revenue growth of 0.15%, while PG&E's is -0.63%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Sempra's ROE at 12.79% and PG&E's ROE at 10.15%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $91.26 for Sempra and $21.13 for PG&E. Over the past year, Sempra's prices ranged from $66.40 to $93.08, with a yearly change of 40.18%. PG&E's prices fluctuated between $15.94 and $21.51, with a yearly change of 34.94%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.