Critical Comparison: Sempra Energy (NYSE:SRE) and Canadian Utilities (OTCMKTS:CDUAF)

Canadian Utilities (OTCMKTS:CDUAF – Get Free Report) and Sempra Energy (NYSE:SRE – Get Free Report) are both utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, analyst recommendations, dividends, earnings and risk.

Dividends

Canadian Utilities pays an annual dividend of $1.04 per share and has a dividend yield of 2.8%. Sempra Energy pays an annual dividend of $2.63 per share and has a dividend yield of 3.1%. Canadian Utilities pays out 40.4% 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. Sempra Energy has increased its dividend for 22 consecutive years. Sempra Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

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Insider & Institutional Ownership

9.7% of Canadian Utilities shares are held by institutional investors. Comparatively, 89.7% of Sempra Energy shares are held by institutional investors. 0.3% of Sempra Energy shares are held by company 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 Canadian Utilities and Sempra Energy’s net margins, return on equity and return on assets.

Earnings and Valuation

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

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for Canadian Utilities and Sempra Energy, as reported by MarketBeat.com.

Sempra Energy has a consensus price target of $103.62, indicating a potential upside of 22.52%. Given Sempra Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Sempra Energy is more favorable than Canadian Utilities.

Summary

Sempra Energy beats Canadian Utilities on 14 of the 15 factors compared between the two stocks.

About Canadian Utilities

(Get Free Report)

Canadian Utilities Limited, together with its subsidiaries, engages in the electricity, natural gas, renewables, pipelines, liquids, and retail energy businesses in Canada, Australia, and internationally. It operates through ATCO Energy Systems, ATCO EnPower, and Corporate & Other segments. The ATCO Energy Systems segment provides regulated electricity transmission and distribution services in northern and central east Alberta, the Yukon, the Northwest Territories, and the Lloydminster area of Saskatchewan; and integrated natural gas transmission and distribution services in Alberta, the Lloydminster area of Saskatchewan, and Western Australia. It owns and operates approximately 9,100 kilometers of natural gas pipelines, 11 compressor sites, approximately 3,600 receipt and delivery points, and a salt cavern natural gas storage peaking facility located near Fort Saskatchewan, Alberta in Canada. The ATCO EnPower segment provides hydro, solar, wind, and natural gas electricity generation; natural gas storage; industrial water solutions; clean fuels, including hydrogen, carbon capture, and underground storage projects; and related infrastructure development in Alberta, the Yukon, the Northwest Territories, Australia, Ontario, Mexico, and Chile. The Corporate & Other segment retails electricity and natural gas; and provides whole-home solutions. The company was incorporated in 1927 and is headquartered in Calgary, Canada. Canadian Utilities Limited is a subsidiary of ATCO Ltd.

About Sempra Energy

(Get Free Report)

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.

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