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Sempra Energy
Sempra Energy has found gold in natural gas. Created in 1998 by the merger of the parent companies of Southern California Gas and San Diego Gas & Electric, the company both delivers natural gas and runs power plants on natural gas. To enlarge its infrastructure, Sempra is building liquefied natural gas terminals in Baja and the Gulf of Mexico as well as a 1,600-mile pipeline. In 2006, with new CEO Donald Felsinger on board, Sempra sold its remaining coal-fired plants at premium prices and wrote off money-losing investments in Argentina. Add in a strong performance by its commodity trading business, and Sempra’s net income jumped 53% in 2006—the eighth year in a row of record earnings. Analysts expect that streak to continue. New supplies of natural gas will boost fees for deliveries and keep fuel costs from soaring, while the power plants’ use of gas makes them less vulnerable than dirtier coal plants to anticipated curbs on carbon emissions.
| Overall Grade | A |
|
| Market Data | SRE | |
| Market Value (2/28/2007) |
$15.7 Billion |
|
| Profitability* | 13.5% | A- |
| Sales Growth Rate** | 15.0% | B+ |
| 12-Month Sales | $11.8 Billion |
|
| 12-Month Net Income | $1.1 Billion |
|
| Total Return | Past 12 Months28.6% | Past 36 Months105.2% |
| Economic Sector | Utilities | |
| Industry | Multi-Utilities | |
The overall sector letter grade reflects how the weighted average of the return on income, or return on equity, and sales growth grades compare with others in the same sector. For the overall grade as well as the ROE/ROI and sales growth grades, an "A" places a company in the top 7% of its sector and an "A-" in the top 14% of the sector. The actual ranking was done using the underlying numerical measures. Grades are for information only.
* For nonfinancial companies, three-year average pretax operating profit before interest and special items as a percentage of average invested capital. For financial companies, pretax profits as a percentage of average shareholder's equity.
*Three-year average annual sales growth based on the most recently reported 36 months, calculated using the least-squares method.
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