Should I Buy Sempra (SRE)? Finance YouTuber Analysis

The YouTuber recommends Sempra for its dependable utility status and nearly 3% yield. The company, with operations in California and Texas, has a growing infrastructure unit and LNG plants. Its dividend has grown steadily at 5% over five years, and earnings growth is expected to sustain this. The payout ratio is very low for a utility, indicating reinvestment into future growth.

“The dividend has grown at a steady 5% Pace over the last 5 years and earnings growth even in the face of Revenue weakness should keep that payout growing”

The analyst notes Sempra Energy's upcoming 2-for-1 stock split and its solid 3.3% dividend yield. While not explicitly a 'buy' recommendation, he highlights that utility stocks like Sempra are good plays in the current market, implying a positive outlook for existing holders or those considering it.

“this California utility company has seen its shares fall about five percent this year along with the rest of the utility sector pays a solid 3.3 dividend yield and these utility stocks are some of the best plays in the market right now”

The YouTuber suggests Sempra could be undervalued based on its price-to-earnings multiple, especially when comparing it to its five and ten-year averages after removing anomalous data points. While the 20-year average suggests it's slightly overvalued, a drop to 12-14x P/E would make it a 'screaming sale'.

“clearly this chart's a bit easier to see that well this stock is undervalued when you look at both the five and the 10 year averages but slightly overvalued when you look at the 20-year average so depending on what our research tells us clearly if this stock gets down to let's say 12 13 14x this thing could be a screaming sale but even right now it could be a bit undervalued and worth at least researching and putting in our Bullpen”