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DBA Sempra Investors, You Need to Know This

A strong performer from today's afternoon trading session is DBA Sempra, whose shares rose 2.0% to $70.87 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.

DBA Sempra's Valuation Is in Line With Its Sector Averages:

Sempra operates as an energy infrastructure company in the United States and internationally. The company belongs to the Utilities sector, which has an average price to earnings (P/E) ratio of 22.89 and an average price to book (P/B) ratio of 1.03. In contrast, DBA Sempra has a trailing 12 month P/E ratio of 17.9 and a P/B ratio of 1.66.

DBA Sempra's PEG ratio is 3.67, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.

Exceptional Profitability Overshadowed by Excessive Leverage:

2018-02-27 2019-02-26 2020-02-27 2021-02-25 2022-02-25 2023-02-28
Revenue (MM) $11,207 $10,102 $10,829 $11,370 $12,857 $14,439
Gross Margins 66.0% 71.0% 75.0% 79.0% 75.0% 69.0%
Operating Margins 21% 20% 24% 25% 22% 18%
Net Margins 2.0% 10.0% 20.0% 35.0% 10.0% 15.0%
Net Income (MM) $257 $1,050 $2,198 $3,933 $1,318 $2,139
Net Interest Expense (MM) -$613 -$801 -$990 -$985 -$1,129 -$979
Depreciation & Amort. (MM) -$1,490 -$1,491 -$1,569 -$1,666 -$1,855 -$2,019
Earnings Per Share $1.01 $3.42 $7.29 $12.88 $3.93 $6.55
EPS Growth n/a 238.61% 113.16% 76.68% -69.49% 66.67%
Diluted Shares (MM) 252 270 282 292 319 320
Free Cash Flow (MM) $7,557 $5,480 $5,897 $7,919 $9,490 $6,875
Capital Expenditures (MM) -$3,932 -$1,964 -$2,809 -$5,328 -$5,648 -$5,733
Net Current Assets (MM) -$31,803 -$37,745 -$40,518 -$38,064 -$39,611 -$43,354
Long Term Debt (MM) $16,445 $22,547 $20,785 $21,781 $21,068 $24,548
Net Debt / EBITDA 5.01 6.88 6.13 5.17 5.12 6.24

DBA Sempra has strong margins with a stable trend, exceptional EPS growth, and wider gross margins than its peer group. However, the firm has a highly leveraged balance sheet. Finally, we note that DBA Sempra has weak revenue growth and a flat capital expenditure trend and irregular cash flows.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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