Sempra Energy (NYSE:SRE) vs. Public Service Enterprise Group (NYSE:PEG) Critical Survey

Public Service Enterprise Group (NYSE:PEG) and Sempra Energy (NYSE:SRE) are both large-cap utilities companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, earnings, institutional ownership, profitability, risk, dividends and analyst recommendations.

Insider & Institutional Ownership

73.3% of Public Service Enterprise Group shares are owned by institutional investors. Comparatively, 89.7% of Sempra Energy shares are owned by institutional investors. 0.2% of Public Service Enterprise Group shares are owned by company insiders. Comparatively, 0.3% of Sempra Energy shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Public Service Enterprise Group and Sempra Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Public Service Enterprise Group	16.04%	12.42%	3.68%
Sempra Energy	16.70%	8.49%	2.98%

Dividends

Public Service Enterprise Group pays an annual dividend of $2.68 per share and has a dividend yield of 3.7%. Sempra Energy pays an annual dividend of $2.63 per share and has a dividend yield of 3.1%. Public Service Enterprise Group pays out 66.7% of its earnings in the form of a dividend. Sempra Energy pays out 76.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Public Service Enterprise Group has raised its dividend for 14 consecutive years and Sempra Energy has raised its dividend for 22 consecutive years. Public Service Enterprise Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Public Service Enterprise Group and Sempra Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Public Service Enterprise Group	0	10	6	1	2.47
Sempra Energy	0	4	10	1	2.80

Public Service Enterprise Group currently has a consensus target price of $89.43, suggesting a potential upside of 22.04%. Sempra Energy has a consensus target price of $103.62, suggesting a potential upside of 22.73%. Given Sempra Energy’s stronger consensus rating and higher possible upside, analysts clearly believe Sempra Energy is more favorable than Public Service Enterprise Group.

Volatility & Risk

Public Service Enterprise Group has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500. Comparatively, Sempra Energy has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500.

Earnings and Valuation

This table compares Public Service Enterprise Group 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
Public Service Enterprise Group	$12.17 billion	3.00	$2.11 billion	$4.02	18.23
Sempra Energy	$13.70 billion	4.03	$1.84 billion	$3.45	24.47

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

Summary

Sempra Energy beats Public Service Enterprise Group on 11 of the 17 factors compared between the two stocks.

About Public Service Enterprise Group

Public Service Enterprise Group Incorporated, through its subsidiaries, operates in electric and gas utility business in the United States. It operates through PSE&G and PSEG Power segments. The PSE&G segment transmits electricity; distributes electricity and natural gas to residential, commercial, and industrial customers; and appliance services and repairs to customers through its service territory, as well as invests in solar generation projects, and energy efficiency and related programs. The PSEG Power segment engages in nuclear generation businesses; and supplies power and natural gas to nuclear power plants and gas storage facilities activities. As of December 31, 2023, it had electric transmission and distribution system of 25,000 circuit miles and 866,600 poles; 56 switching stations with an installed capacity of 39,953 megavolt-amperes (MVA), and 235 substations with an installed capacity of 10,382 MVA; 109 MVA aggregate installed capacity for substations; four electric distribution headquarters and five electric sub-headquarters; 18,000 miles of gas mains, 12 gas distribution headquarters, two sub-headquarters, and one meter shop, as well as 56 natural gas metering and regulating stations; and 158 MegaWatts defined conditions of installed PV solar capacity. Public Service Enterprise Group Incorporated was founded in 1903 and is based in Newark, New Jersey.

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.