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Sempra Energy SRE benefits from systematic investments that improve the stability of its operations, allowing it to serve its customers efficiently. The company is also expanding its liquid natural gas (LNG) operations to strengthen its position in the U.S. LNG market.

However, this Zacks Rank #3 (Hold) company is exposed to risks like unattractive valuation and increased wildfire events.

Positive Drivers for SRE

Sempra Energy has a capital investment plan of $56 billion for 2025-2029 to strengthen its infrastructure and enable the company to serve its customers more efficiently. SRE expects this systematic investment to drive rate base growth of 10% annually during 2025-2029.

SRE is well-positioned with strategically located opportunities in North America as the demand for LNG continues to rise globally. During 2025, the company plans to invest $13 billion, the majority of which will go toward transmission and distribution enhancements at its regulated public utilities, as well as the building of the PA LNG Phase 1 project, the ECA LNG Phase 1 project, and natural gas pipelines at Sempra Infrastructure.

Utility service providers like Sempra Energy are investing in adding more renewable energy to their portfolio to qualify for the utility-scale renewable energy market's financial, environmental, social and governance incentives. Sempra Infrastructure is currently developing the Cimarrón Wind project, a 320-megawatt wind production facility in Baja California, Mexico. The project is scheduled to generate energy in late 2025 and start commercial operations in the first half of 2026.

Factors That May Affect Sempra Energy’s Stock

Investors may be concerned about the company's comparative study of its trailing 12-month Enterprise Value/Sales (EV/Sales) ratio, which paints a somewhat dismal image. The stock reportedly has a trailing 12-month EV/Sales ratio of 6.22, which is greater than the industry’s 4.83 EV/sales ratio.

In recent years, California experienced some of its greatest wildfires. These wildfires can create temporary power outages in the service zones of SDG&E and SoCalGas, as well as damage Sempra Energy's electric and natural gas infrastructure, resulting in considerable losses.

SRE Stock’s Price Movement

In the past month, Sempra Energy’s shares have risen 4.3% compared with the industry’s growth of 0.7%.

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Stocks to Consider

Some better-ranked stocks from the same industry are Southwest Gas SWX, which sports a Zacks Rank #1 (Strong Buy), and Atmos Energy Corp. ATO and UGI Corporation UGI, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

SWX’s long-term (three to five years) earnings growth rate is 9.9%. The Zacks Consensus Estimate for its 2025 earnings per share stands at $3.74, which indicates a year-over-year rally of 18.4%.

ATO’s long-term earnings growth rate is 7.2%. The Zacks Consensus Estimate for its fiscal 2025 earnings per share stands at $7.22, which suggests a year-over-year rise of 5.7%.

UGI’s long-term earnings growth rate is 5.2%. The Zacks Consensus Estimate for its fiscal 2025 earnings per share stands at $3.08, which implies year-over-year growth of 0.7%.

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Sempra Energy (SRE) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.