Sempra Energy (SRE) vs. Avista Corporation (AVA) Financial Survey
Sempra Energy (NYSE: SRE) and Avista Corporation (NYSE:AVA) are both mid-cap utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, institutional ownership, profitability and risk.
Risk and Volatility
Sempra Energy has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500. Comparatively, Avista Corporation has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500.
Sempra Energy pays an annual dividend of $3.29 per share and has a dividend yield of 2.8%. Avista Corporation pays an annual dividend of $1.43 per share and has a dividend yield of 2.8%. Sempra Energy pays out 48.7% of its earnings in the form of a dividend. Avista Corporation pays out 67.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Sempra Energy has increased its dividend for 6 consecutive years and Avista Corporation has increased its dividend for 14 consecutive years. Avista Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of current ratings and recommmendations for Sempra Energy and Avista Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Sempra Energy presently has a consensus price target of $121.60, suggesting a potential upside of 2.16%. Avista Corporation has a consensus price target of $44.00, suggesting a potential downside of 14.78%. Given Sempra Energy’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Sempra Energy is more favorable than Avista Corporation.
Earnings & Valuation
This table compares Sempra Energy and Avista Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Sempra Energy||$10.97 billion||2.72||$3.71 billion||$6.75||17.63|
|Avista Corporation||$1.46 billion||2.28||$471.76 million||$2.11||24.47|
Sempra Energy has higher revenue and earnings than Avista Corporation. Sempra Energy is trading at a lower price-to-earnings ratio than Avista Corporation, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
80.5% of Sempra Energy shares are held by institutional investors. Comparatively, 69.3% of Avista Corporation shares are held by institutional investors. 0.2% of Sempra Energy shares are held by insiders. Comparatively, 1.1% of Avista Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This table compares Sempra Energy and Avista Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Sempra Energy beats Avista Corporation on 13 of the 17 factors compared between the two stocks.
About Sempra Energy
Sempra Energy is a holding company. The Company’s principal operating units are Sempra Utilities, which includes its San Diego Gas & Electric Company (SDG&E), Southern California Gas Company (SoCalGas) and Sempra South American Utilities segments, and Sempra Infrastructure, which includes its Sempra Mexico, Sempra Renewables and Sempra LNG & Midstream segments. As of December 31, 2016, SDG&E’s service area covered 4,100 square miles. Sempra South American Utilities operates Chilquinta Energia, which serves customers in the region of Valparaiso in central Chile. As of December 31, 2016, SoCalGas had natural gas franchises with the 12 counties and the 223 cities in its service territory. Sempra LNG & Midstream owns land in Simpson County, Mississippi Hub. Sempra LNG & Midstream owns land in Port Arthur, Texas. Sempra Renewables has operations, investments or development projects in the various United States markets.
About Avista Corporation
Avista Corporation is an electric and natural gas utility company. The Company operates through two segments: Avista Utilities, and Alaska Electric Light and Power Company (AEL&P). The Company’s regional services include government and higher education, medical services, retail trade and finance. The Company’s businesses also include sheet metal fabrication, venture fund investments, real estate investments, a company that explores markets that could be served with liquefied natural gas (LNG), as well as certain other investments of Avista Capital, which is a subsidiary of the Company. Avista Utilities is an operating division of the Company, which consists of its regulated utility operations in the Pacific Northwest. Avista Utilities division generates, transmits and distributes electricity, and distributes natural gas. As of December 31, 2016, AEL&P operated five hydroelectric generation facilities with 102.7 megawatts (MW) of hydroelectric generation capacity.
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