Head to Head Comparison: Algonquin Power & Utilities (NYSE:AQN) versus Sempra Energy (NYSE:SRE)

Algonquin Power & Utilities (NYSE:AQN) and Sempra Energy (NYSE:SRE) are both utilities companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, earnings, institutional ownership and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Algonquin Power & Utilities and Sempra Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Algonquin Power & Utilities	0	6	6	0	2.50
Sempra Energy	0	5	9	1	2.73

Algonquin Power & Utilities currently has a consensus price target of $6.72, suggesting a potential upside of 18.82%. Sempra Energy has a consensus price target of $102.92, suggesting a potential upside of 25.98%. Given Sempra Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Sempra Energy is more favorable than Algonquin Power & Utilities.

Valuation and Earnings

This table compares Algonquin Power & Utilities 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
Algonquin Power & Utilities	$2.43 billion	1.79	$180.80 million	$0.19	29.79
Sempra Energy	$13.70 billion	3.90	$1.84 billion	$3.45	23.68

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

Profitability

This table compares Algonquin Power & Utilities and Sempra Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Algonquin Power & Utilities	5.77%	5.16%	1.79%
Sempra Energy	16.70%	8.49%	2.98%

Risk & Volatility

Algonquin Power & Utilities has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Sempra Energy has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500.

Institutional & Insider Ownership

62.3% of Algonquin Power & Utilities shares are owned by institutional investors. Comparatively, 89.7% of Sempra Energy shares are owned by institutional investors. 0.1% of Algonquin Power & Utilities shares are owned by insiders. Comparatively, 0.3% of Sempra Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Algonquin Power & Utilities pays an annual dividend of $0.26 per share and has a dividend yield of 4.6%. Sempra Energy pays an annual dividend of $2.63 per share and has a dividend yield of 3.2%. Algonquin Power & Utilities pays out 136.8% 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 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.

Summary

Sempra Energy beats Algonquin Power & Utilities on 15 of the 18 factors compared between the two stocks.

About Algonquin Power & Utilities

Algonquin Power & Utilities Corp. is an investment holding company, which engages in energy generation and water distribution facilities. It operates through the Regulated Services Group and Renewable Energy Group segments. The Regulated Services Group segment owns and operates a portfolio of electric, natural gas, water distribution, and wastewater collection utility systems and transmission. The Renewable Energy Group segment focuses on operating a diversified portfolio of renewable and thermal electric generation assets. The company was founded on August 1, 1988 and is headquartered in Oakville, Canada.

About Sempra Energy

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.