Analyzing ATCO (OTCMKTS:ACLLF) & Sempra Energy (NYSE:SRE)

Sempra Energy (NYSE:SRE) and ATCO (OTCMKTS:ACLLF) are both utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, valuation, profitability, institutional ownership and earnings.

Analyst Recommendations

This is a breakdown of current ratings for Sempra Energy and ATCO, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sempra Energy	0	4	10	1	2.80
ATCO	0	4	2	0	2.33

Sempra Energy presently has a consensus target price of $103.62, indicating a potential upside of 25.03%. Given Sempra Energy’s stronger consensus rating and higher probable upside, equities analysts plainly believe Sempra Energy is more favorable than ATCO.

Dividends

Sempra Energy pays an annual dividend of $2.63 per share and has a dividend yield of 3.2%. ATCO pays an annual dividend of $0.83 per share and has a dividend yield of 1.5%. 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. ATCO pays out 24.2% of its earnings in the form of a dividend. Sempra Energy has increased its dividend for 22 consecutive years. Sempra Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Sempra Energy and ATCO’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sempra Energy	16.70%	8.49%	2.98%
ATCO	N/A	N/A	N/A

Valuation & Earnings

This table compares Sempra Energy and ATCO”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sempra Energy	$13.70 billion	3.95	$1.84 billion	$3.45	24.02
ATCO	N/A	N/A	N/A	$3.44	15.71

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

Insider & Institutional Ownership

89.7% of Sempra Energy shares are held by institutional investors. Comparatively, 24.5% of ATCO shares are held by institutional investors. 0.3% 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 company will outperform the market over the long term.

Summary

Sempra Energy beats ATCO on 14 of the 15 factors compared between the two stocks.

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.

About ATCO

ATCO Ltd., together with its subsidiaries, engages in the provision of energy, logistics and transportation, water, food and agriculture, real estate, and shelter services in Canada, Australia, and internationally. The company engages in the electricity and natural gas transmission and distribution, and international electricity operations; energy storage, electricity generation, industrial water solutions, and clean fuels; and electricity and natural gas retail sales, and whole-home solutions. It also offers workforce and residential housing, modular facilities, construction and site support, workforce lodging, facility operations and maintenance, defense operations, and disaster and emergency management services. In addition, the company provides commercial real estate services, including sale, lease, and development of office and industrial properties; process and markets fly ash; and generates electricity through hydro, solar, wind, and natural gas facilities. Further, the company provides ports and transportation logistics; natural gas liquids storage services; and provides integrated water services, including pipeline transportation, storage, water treatment, recycling, and disposal to various industrial customers. ATCO Ltd. was founded in 1947 and is headquartered in Calgary, Canada. ATCO Ltd. is a subsidiary of Sentgraf Enterprises Ltd.