Comparing DTE Energy (NYSE:DTE) & Sempra Energy (NYSE:SRE)

DTE Energy (NYSE:DTE) and Sempra Energy (NYSE:SRE) are both large-cap utilities companies, but which is the better business? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares DTE Energy and Sempra Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DTE Energy	8.00%	12.19%	2.74%
Sempra Energy	16.70%	8.49%	2.98%

Insider & Institutional Ownership

76.1% of DTE Energy shares are held by institutional investors. Comparatively, 89.7% of Sempra Energy shares are held by institutional investors. 0.6% of DTE Energy shares are held by insiders. Comparatively, 0.3% of Sempra Energy shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for DTE Energy and Sempra Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DTE Energy	0	5	9	1	2.73
Sempra Energy	0	4	10	1	2.80

DTE Energy presently has a consensus target price of $158.62, indicating a potential upside of 13.30%. Sempra Energy has a consensus target price of $104.23, indicating a potential upside of 24.00%. Given Sempra Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Sempra Energy is more favorable than DTE Energy.

Risk and Volatility

DTE Energy has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500. Comparatively, Sempra Energy has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.

Earnings and Valuation

This table compares DTE Energy and Sempra Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DTE Energy	$15.81 billion	1.84	$1.46 billion	$6.32	22.15
Sempra Energy	$13.70 billion	4.01	$1.84 billion	$2.95	28.49

Sempra Energy has lower revenue, but higher earnings than DTE Energy. DTE Energy is trading at a lower price-to-earnings ratio than Sempra Energy, indicating that it is currently the more affordable of the two stocks.

Dividends

DTE Energy pays an annual dividend of $4.66 per share and has a dividend yield of 3.3%. Sempra Energy pays an annual dividend of $2.63 per share and has a dividend yield of 3.1%. DTE Energy pays out 73.7% of its earnings in the form of a dividend. Sempra Energy pays out 89.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DTE Energy has increased its dividend for 16 consecutive years and Sempra Energy has increased its dividend for 22 consecutive years. DTE Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Sempra Energy beats DTE Energy on 11 of the 17 factors compared between the two stocks.

About DTE Energy

DTE Energy Company engages in the utility operations. The company's Electric segment generates, purchases, distributes, and sells electricity to various residential, commercial, and industrial customers in southeastern Michigan. It generates electricity through coal-fired plants, hydroelectric pumped storage, and nuclear plants, as well as wind and solar assets. This segment owns and operates distribution substations and line transformers. The company's Gas segment purchases, stores, transports, distributes, and sells natural gas to various residential, commercial, and industrial customers throughout Michigan; and sells storage and transportation capacity. Its DTE Vantage segment offers metallurgical and petroleum coke to steel and other industries; and power generation, steam production, chilled water production, and wastewater treatment services, as well as air supplies compressed air to industrial customers. Its Energy Trading segment engages in power, natural gas, and environmental marketing and trading; structured transactions; and the optimization of contracted natural gas pipeline transportation and storage positions. The company was founded in 1849 and is based in Detroit, Michigan.

About Sempra Energy

Sempra operates as an energy infrastructure company in the United States and internationally. It operates through three segments: Sempra California, Sempra Texas Utilities, and Sempra Infrastructure. The Sempra California segment provides electric services; and natural gas services to San Diego County. As of December 31, 2023, it offered electric services to approximately 3.6 million population and natural gas services to approximately 3.3 million population that covers 4,100 square miles. This segment owns and operates a natural gas distribution, transmission, and storage system that supplies natural gas. As of December 31, 2023, it serves a population of 21 million covering an area of 24,000 square miles. The Sempra Texas Utilities segment engages in the regulated electricity transmission and distribution. As of December 31, 2023, its transmission system included 18,298 circuit miles of transmission lines; 1,257 transmission and distribution substations; interconnection to 173 third-party generation facilities totaling 54,277 MW; and distribution system included approximately 4.0 million points of delivery and consisted of 125,116 miles of overhead and underground lines. The Sempra Infrastructure segment develops, builds, operates, and invests in energy infrastructure to help enable the energy transition in North American markets and worldwide. The company was formerly known as Sempra Energy and changed its name to Sempra in May 2023. Sempra was incorporated in 1996 and is based in San Diego, California.