Sempra

Sempra is an American energy infrastructure holding company whose principal businesses are regulated electric and natural gas utilities in California and Texas, complemented by a liquefied natural gas (LNG) development and export platform that it is in the process of deconsolidating. The company generated $13.7 billion in revenue in fiscal 2025 and serves approximately 40 million consumers across its utility footprint, making it one of the largest utility holding companies in the United States.

This is a story about a company performing open-heart surgery on its own business model in full public view. Over the past eighteen months, Sempra has sold a 45% stake in its Sempra Infrastructure Partners (SI Partners) LNG platform to KKR-managed funds for nearly $10 billion, announced the sale of its Mexican gas distribution utility Ecogas, and launched a record $65 billion five-year capital plan — 95% of it directed at regulated utilities — that will grow rate base at an 11% compound annual rate to $97 billion by 2030. The plan requires no new common equity. If management executes, Sempra transitions from a conglomerate whose earnings mix made it difficult to value into a pure-play regulated utility with one of the highest projected growth rates in the sector.

The file turns on a single question: whether the Texas growth machine — Oncor, Sempra's 80.25%-owned transmission and distribution utility — can earn close to its newly authorized 9.75% return on equity (ROE) while absorbing more than $47 billion of capital over five years, and whether the balance sheet can support it all without the equity overhang that haunted the stock through 2024.