Head to Head Analysis: UGI (UGI) and Sempra Energy (SRE)

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

Profitability

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

Net Margins Return on Equity Return on Assets
UGI 8.71% 10.88% 3.65%
Sempra Energy 2.28% 8.86% 2.76%

Valuation and Earnings

This table compares UGI and Sempra Energy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
UGI $6.12 billion 1.27 $436.60 million $2.29 19.61
Sempra Energy $11.21 billion 2.52 $257.00 million $5.42 20.41

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

Risk & Volatility

UGI has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Sempra Energy has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500.

Insider & Institutional Ownership

78.2% of UGI shares are owned by institutional investors. Comparatively, 82.4% of Sempra Energy shares are owned by institutional investors. 2.4% of UGI shares are owned by company insiders. Comparatively, 0.2% of Sempra Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

UGI pays an annual dividend of $1.00 per share and has a dividend yield of 2.2%. Sempra Energy pays an annual dividend of $3.58 per share and has a dividend yield of 3.2%. UGI pays out 43.7% of its earnings in the form of a dividend. Sempra Energy pays out 66.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. UGI has increased its dividend for 32 consecutive years and Sempra Energy has increased its dividend for 7 consecutive years.

Analyst Ratings

This is a breakdown of current ratings for UGI and Sempra Energy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
UGI 1 2 1 0 2.00
Sempra Energy 0 4 6 0 2.60

UGI presently has a consensus price target of $47.00, suggesting a potential upside of 4.68%. Sempra Energy has a consensus price target of $119.80, suggesting a potential upside of 8.30%. Given Sempra Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Sempra Energy is more favorable than UGI.

Summary

Sempra Energy beats UGI on 9 of the 17 factors compared between the two stocks.

UGI Company Profile

UGI Corporation distributes, stores, transports, and markets energy products and related services in the United States and internationally. It distributes propane to approximately 1.9 million residential, commercial/industrial, motor fuel, agricultural, and wholesale customers in 50 states through 1,900 propane distribution locations; and sells, installs, and services propane appliances, including heating systems. The company also distributes liquid petroleum gas (LPG) to residential, commercial, industrial, agricultural, resale, and automobile fuel customers for heating, cooking, motor fuel, leisure, construction work, manufacturing, crop drying, power generation, aerosol propellant, and irrigation activities; and provides logistic, storage, and other services to third-party LPG distributors. In addition, it engages in the retail sale of natural gas, liquid fuels, and electricity to approximately 14,000 residential, commercial, and industrial customers at approximately 37,000 locations. Further, the company distributes natural gas to approximately 635,000 customers in the portions of 44 eastern and central Pennsylvania counties through its distribution system of 12,300 miles of gas mains; and supplies electricity to approximately 62,000 customers in northeastern Pennsylvania through 2,200 miles of lines and 13 substations. Additionally, it operates electric generation facilities, which include coal-fired, landfill gas-fueled, solar-powered, and natural gas-fueled facilities; a natural gas liquefaction, storage, and vaporization facility; propane storage and propane-air mixing stations; and rail transshipment terminals. It also manages natural gas pipeline and storage contracts; develops, owns, and operates pipelines, gathering infrastructure, and gas storage facilities; and offers heating, ventilation, air conditioning, refrigeration, mechanical, and electrical contracting services. UGI Corporation was founded in 1882 and is based in King of Prussia, Pennsylvania.

Sempra Energy Company Profile

Sempra Energy, together with its subsidiaries, invests in, develops, and operates energy infrastructure, as well as provides electric and gas services in the United States and internationally. The company's San Diego Gas & Electric Company segment engages in the generation, transmission, and distribution of electricity. This segment also sells, distributes, and transports natural gas. Its Southern California Gas Company segment owns and operates a natural gas distribution, transmission, and storage system that supplies natural gas. The company's Sempra South American Utilities segment develops, owns, operates, or holds interests in electric transmission, distribution, and generation infrastructure facilities. Its Sempra Mexico segment owns, develops, and operates natural gas transmission pipelines; liquid petroleum gas and ethane systems; electric generation facilities; a natural gas distribution utility; and liquefied natural gas (LNG) regasification terminals, as well as associated storage terminals. The company's Sempra Renewables segment develops, owns, operates, or holds interests in wind and solar power generation facilities. Its Sempra LNG & Midstream segment develops, owns, operates, or holds interests in LNG, and natural gas midstream assets and operations in Alabama, Louisiana, Mississippi, and Texas. The company primarily serves residential, commercial, and industrial customers. Sempra Energy was founded in 1998 and is headquartered in San Diego, California.

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