Head-To-Head Review: Sempra Energy (NYSE:SRE) and Consolidated Edison (NYSE:ED)

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

Insider & Institutional Ownership

66.3% of Consolidated Edison shares are held by institutional investors. Comparatively, 89.7% of Sempra Energy shares are held by institutional investors. 0.2% of Consolidated Edison shares are held by insiders. Comparatively, 0.3% of Sempra Energy 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Consolidated Edison	12.53%	8.44%	2.83%
Sempra Energy	16.70%	8.49%	2.98%

Dividends

Consolidated Edison pays an annual dividend of $3.55 per share and has a dividend yield of 3.0%. Sempra Energy pays an annual dividend of $2.63 per share and has a dividend yield of 3.1%. Consolidated Edison pays out 58.3% 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. Consolidated Edison has increased its dividend for 52 consecutive years and Sempra Energy has increased its dividend for 22 consecutive years.

Earnings & Valuation

This table compares Consolidated Edison and Sempra Energy”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Consolidated Edison	$16.92 billion	2.59	$2.02 billion	$6.09	19.48
Sempra Energy	$13.70 billion	4.11	$1.84 billion	$3.45	24.93

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

Volatility & Risk

Consolidated Edison has a beta of 0.26, meaning that its share price is 74% less volatile than the S&P 500. Comparatively, Sempra Energy has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Consolidated Edison and Sempra Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Consolidated Edison	6	9	4	0	1.89
Sempra Energy	0	5	14	0	2.74

Consolidated Edison currently has a consensus price target of $108.09, suggesting a potential downside of 8.87%. Sempra Energy has a consensus price target of $100.53, suggesting a potential upside of 16.86%. Given Sempra Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Sempra Energy is more favorable than Consolidated Edison.

Summary

Sempra Energy beats Consolidated Edison on 12 of the 17 factors compared between the two stocks.

About Consolidated Edison

Consolidated Edison, Inc., through its subsidiaries, engages in the regulated electric, gas, and steam delivery businesses in the United States. It offers electric services to approximately 3.7 million customers in New York City and Westchester County; gas to approximately 1.1 million customers in Manhattan, the Bronx, parts of Queens, and Westchester County; and steam to approximately 1,530 customers in parts of Manhattan. The company also supplies electricity to approximately 0.3 million customers in southeastern New York and northern New Jersey; and gas to approximately 0.2 million customers in southeastern New York. In addition, it operates 545 circuit miles of transmission lines; 15 transmission substations; 63 distribution substations; 90,051 in-service line transformers; 3,788 pole miles of overhead distribution lines; and 2,314 miles of underground distribution lines, as well as 4,363 miles of mains and 380,870 service lines for natural gas distribution. Further, the company invests in electric and gas transmission projects. It primarily sells electricity to industrial, commercial, residential, and government customers. Consolidated Edison, Inc. was founded in 1823 and is based in New York, New York.

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.