MDU Resources Group (NYSE: MDU) and Sempra Energy (NYSE:SRE) are both mid-cap utilities companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, dividends and risk.
Valuation & Earnings
This table compares MDU Resources Group and Sempra Energy’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|MDU Resources Group||$4.13 billion||1.26||$64.43 million||$1.18||22.56|
|Sempra Energy||$10.18 billion||3.01||$1.37 billion||$4.51||27.04|
Sempra Energy has higher revenue and earnings than MDU Resources Group. MDU Resources Group 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
MDU Resources Group has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500. Comparatively, Sempra Energy has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500.
Institutional & Insider Ownership
63.8% of MDU Resources Group shares are held by institutional investors. Comparatively, 80.6% of Sempra Energy shares are held by institutional investors. 1.0% of MDU Resources Group shares are held by company insiders. Comparatively, 0.2% of Sempra Energy shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares MDU Resources Group and Sempra Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|MDU Resources Group||5.39%||10.20%||3.78%|
This is a summary of recent ratings and price targets for MDU Resources Group and Sempra Energy, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|MDU Resources Group||0||1||1||0||2.50|
MDU Resources Group currently has a consensus price target of $32.00, indicating a potential upside of 20.21%. Sempra Energy has a consensus price target of $124.13, indicating a potential upside of 1.78%. Given MDU Resources Group’s higher possible upside, research analysts clearly believe MDU Resources Group is more favorable than Sempra Energy.
MDU Resources Group pays an annual dividend of $0.77 per share and has a dividend yield of 2.9%. Sempra Energy pays an annual dividend of $3.29 per share and has a dividend yield of 2.7%. MDU Resources Group pays out 65.3% of its earnings in the form of a dividend. Sempra Energy pays out 72.9% 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. MDU Resources Group has raised its dividend for 6 consecutive years and Sempra Energy has raised its dividend for 7 consecutive years. MDU Resources Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
Sempra Energy beats MDU Resources Group on 10 of the 17 factors compared between the two stocks.
MDU Resources Group Company Profile
MDU Resources Group, Inc. is engaged in regulated energy delivery and construction materials and services business. The Company’s businesses segments are electric, natural gas distribution, pipeline and midstream, construction materials and contracting, and construction services. The electric segment generates, transmits and distributes electricity. The natural gas distribution segment distributes natural gas. The pipeline and midstream segment provides natural gas transportation, underground storage, processing and gathering services, as well as oil gathering. The construction materials and contracting segment mines aggregates and markets crushed stone, sand, gravel and related construction materials, including ready-mixed concrete, asphalt, liquid asphalt and other value-added products. The construction services segment provides utility construction services in constructing and maintaining electric and communication lines, and external lighting and traffic signalization.
Sempra Energy Company Profile
Sempra Energy is a holding company. The Company’s principal operating units are Sempra Utilities, which includes its San Diego Gas & Electric Company (SDG&E), Southern California Gas Company (SoCalGas) and Sempra South American Utilities segments, and Sempra Infrastructure, which includes its Sempra Mexico, Sempra Renewables and Sempra LNG & Midstream segments. As of December 31, 2016, SDG&E’s service area covered 4,100 square miles. Sempra South American Utilities operates Chilquinta Energia, which serves customers in the region of Valparaiso in central Chile. As of December 31, 2016, SoCalGas had natural gas franchises with the 12 counties and the 223 cities in its service territory. Sempra LNG & Midstream owns land in Simpson County, Mississippi Hub. Sempra LNG & Midstream owns land in Port Arthur, Texas. Sempra Renewables has operations, investments or development projects in the various United States markets.
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