Sempra offers defensive rate-base compounding through Texas grid growth and a $65 billion capital plan, but leverage, wildfire liability, and LNG execution constrain near-term upside.
Overview
Sempra is a North American energy-infrastructure holding company combining regulated utility cash flows from SDG&E, SoCalGas, and an 80.25% indirect interest in Oncor with contracted LNG and infrastructure assets. Its moat rests on monopoly service territories, high replacement costs, captive customers, regulatory cost recovery, and strategic access to Gulf Coast and Baja California export routes. The principal growth engine is rate-base compounding: management is deploying a $65 billion 2026–2030 capital plan, more than 95% of which targets regulated California and Texas assets, while Oncor has a separate $47.5 billion plan and a 44 GW large-load pipeline. **Q2 2026 adjusted EPS rose 30.3% to $1.16**, beating consensus by $0.13, and EBIT margin expanded to 27.76% from 19.47%, despite revenue of $2.997 billion missing estimates. Management reaffirmed 2026 adjusted EPS guidance of $4.80–$5.30, 2027 guidance of $5.10–$5.70, and long-term EPS growth of 7%–9%. **The key near-term catalysts are the $10 billion KKR transaction and ECA LNG startup**, though the stock’s 24.31x–25.33x trailing P/E already exceeds the integrated-utility average of roughly 18.7x.