SEMPRA ENERGY SRE
Sempra Energy is an energy services holding corporation founded in 1998 in San Diego, California. It distributes electricity and or natural gas to over 3.4 million consumers. Major competitors of Sempra Energy include PacifiCorp, PG&E Corporation, Edison International, CMS Energy Corporation, among others. San Diego Gas and Electric, a segment of Sempra controls 2.98% of the market share while the other segment, the Southern California Gas controls 3.87% of the market share. This is far behind the 28.43% market share controlled by PG&E Corporation.
Sempra’s stock prices were relatively stable during the six months period from August 2015 to February 2016. Sempra’s stock price increased steadily during the period except between 14th August 2015 and 18th September. This was due to the fall in the prices of natural gas which affected the performance of firms in the industry. The graph below shows that there were no steep falls or rises in the Sempra’s stock price. There were slight declines in the stock price between December 7th and 18th 2015. The fall was after the company had said it was too early to determine the cost of the leak natural gas in the Fernando Valley (Albright, 2016). In October 2015, a leak was found in one of the wells operated by the Southern California Gas Company. Bloomberg estimated that the spill could lead to losses amounting to about $900 million. The stock price also experienced a slight fall on 8th January 2016 (Albright, 2016).
The four-year stock analysis indicates that Sempra’s stock price increased steadily over the period from February 2012 and February 2016 except for the period between July 2015 and January 2016. The company performed well during the period with total revenues increasing in each of the years. This is also attributed to the improving performance of the natural gas industry. Sempra Energy’s dividends increased by 80% from 2010 to 2015 (Sempra.com, 2016).
PG&E Corporation
It is one of the major competitors of Sempra Energy Corporation in the natural gas industry. It was founded in 1905 in San Francisco, California. It supplies natural gas and electricity to domestic, commercial, agricultural and industrial customers. It is one of the largest in the industry and controls about 28% of the total market share. Its main competitors include Sempra Energy Corporation, Edison International, CMS Energy, among other corporations. Analysis of the firm’s daily stock prices for the last six months shows that the stock is highly volatile as demonstrated by the sharp changes in prices especially between July and September 2015. The stock price fell between August and September 2015 as its third quarter revenues declined. The year 2015 also saw a decrease in the company’s total revenues by 1%.
The four-year stock analysis indicates that company’s stock price steadily increased during the period with the exception of October 2012, 2013 as well as August 2014 and 2015. Its total revenues increased in 2013 and 2014, and this explains its stock price rise from 2014.
A combined analysis shows that both stocks experienced increases in their prices. Sempra’s stock price was higher than that of PG&E during the entire 4-year period. Besides, Sempra’s stock price increased more rapidly as shown on the graph below. The curve for Sempra’s stock is steeper than those of PG&E.
The most challenging part was gathering necessary qualitative information to explain the changes in stock prices. Stock price movements are a result of several factors that influence investors’ perception of the company’s future performance.
References
Albright, A. (2016). Sempra Energy (SRE) Stock Down on Unknown Cost of Gas Leak. TheStreet. Retrieved 23 February 2016, from http://www.thestreet.com/story/13389000/1/sempra-energy-sre-stock-down-on-unknown-cost-of-gas-leak.html
Sempra.com,. (2016). Sempra Energy | 2014 Annual Report. Retrieved 23 February 2016, from http://www.sempra.com/annualreport/
