Voss Capital Proposes Sempra Spin-Off of Oncor Electric Unit
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Source: seekingalpha
- Spin-Off Proposal: Activist investor Voss Capital has proposed that Sempra spin off its Texas electric unit, Oncor, believing that an independent Oncor could become the highest-growth public transmission utility in the U.S., potentially reaching a valuation of $78 billion by the end of 2028.
- Market Potential: Voss Capital, which owns approximately 2 million shares of Sempra, argues that the value of Sempra's 80% stake in Oncor could exceed its current market capitalization of $59 billion, indicating significant market potential.
- Business Structure Optimization: With Sempra operating three distinct businesses—Southern California utilities, Oncor, and Sempra Infrastructure—spinning off Oncor could enhance its business structure and improve overall operational efficiency.
- Market Reaction: While Oncor has not provided immediate comments and Sempra has not responded to the request for comment, the growing attention on the spin-off proposal may influence future stock price movements.
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Analyst Views on SRE
Wall Street analysts forecast SRE stock price to rise
12 Analyst Rating
9 Buy
3 Hold
0 Sell
Strong Buy
Current: 90.030
Low
89.00
Averages
100.58
High
115.00
Current: 90.030
Low
89.00
Averages
100.58
High
115.00
About SRE
Sempra is a North American energy infrastructure company. The Company's businesses invest in, develop and operate energy infrastructure, and provide electric and gas services to customers. Its segments include Sempra California, Sempra Texas Utilities, and Sempra Infrastructure. The Sempra California segment provides natural gas and electric service to Southern California and part of central California through its subsidiaries, SDG&E and SoCalGas. The Sempra Texas Utilities segment holds its investment in Oncor Holdings, which owns an over 80.25% interest in Oncor, a regulated electric transmission and distribution utility serving customers in the north-central, eastern, western and panhandle regions of Texas, and its indirect 50% interest in Sharyland Holdings, which owns Sharyland Utilities, a regulated electric transmission utility serving customers near the Texas-Mexico border. The Sempra Infrastructure segment develops, builds, operates and invests in energy infrastructure.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Voss Capital Proposes Sempra Spin-Off of Oncor Electric Unit
- Spin-Off Proposal: Activist investor Voss Capital has proposed that Sempra spin off its Texas electric unit, Oncor, believing that an independent Oncor could become the highest-growth public transmission utility in the U.S., potentially reaching a valuation of $78 billion by the end of 2028.
- Market Potential: Voss Capital, which owns approximately 2 million shares of Sempra, argues that the value of Sempra's 80% stake in Oncor could exceed its current market capitalization of $59 billion, indicating significant market potential.
- Business Structure Optimization: With Sempra operating three distinct businesses—Southern California utilities, Oncor, and Sempra Infrastructure—spinning off Oncor could enhance its business structure and improve overall operational efficiency.
- Market Reaction: While Oncor has not provided immediate comments and Sempra has not responded to the request for comment, the growing attention on the spin-off proposal may influence future stock price movements.
See More
Voss Capital Urges Sempra to Spin Off Oncor Electricity Unit
- Spin-Off Proposal: Activist investor Voss Capital has urged Sempra to spin off its Oncor electricity unit, arguing that an independent Oncor would become the highest-growth public transmission utility in the U.S., potentially reaching a valuation of $78 billion by 2028, thereby enhancing investor clarity regarding the company's structure.
- Market Potential: Voss highlighted that Sempra controls approximately 80% of Oncor, and a spin-off would result in Oncor's valuation exceeding Sempra's current market value, indicating that separation could create a clearer value proposition for investors.
- Risk Management: An independent Oncor would be insulated from the wildfire risks that have severely impacted California utilities over the past decade, which Voss believes will attract more investor support for the spin-off proposal.
- Growing Power Demand: Texas is projected to see significant increases in power demand in the coming years, with the Electric Reliability Council forecasting peak electricity demand to rise from 98,087 megawatts in 2026 to 111,318 megawatts by 2032, positioning Oncor as a key player in meeting this demand.
See More
The Potential and Challenges of Coal's Revival
- Surging Market Demand: Babcock & Wilcox (B & W) currently holds a $2.7 billion backlog, with $2.4 billion stemming from its partnership with Applied Digital, indicating a robust growth in power demand driven by the data center boom, which may lead to a revival of coal.
- Significant Stock Performance: B & W's stock has surged 244% over the past year, rising from below $1 to $21, reflecting optimistic market expectations for its future growth potential, despite facing controversies related to Applied Digital.
- Policy Support for Coal: President Trump and the Energy Secretary are actively working to prevent the closure of coal plants, viewing coal as a vital national security resource, which could provide new business opportunities for companies like B & W, despite ongoing environmental concerns.
- Changing Competitive Landscape: B & W possesses unique capabilities in building natural gas power plants, and with GE Vernova currently at capacity, B & W's expansion potential may position it favorably in the future energy market, particularly in the combined use of coal and natural gas.
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Sempra Declares Quarterly Dividend of $0.6575 per Share
- Quarterly Dividend Announcement: Sempra's board has declared a quarterly dividend of $0.6575 per share, payable on July 15, 2026, to shareholders of record as of June 25, 2026, demonstrating the company's ongoing commitment to shareholder returns.
- Shareholder Return Strategy: This dividend payment reflects Sempra's strong performance in maintaining stable cash flow and profitability, aimed at boosting investor confidence and attracting more long-term investors.
- Leadership in Energy Network: As one of North America's largest energy networks, Sempra plays a crucial role in enhancing electricity supply and energy resilience in California and Texas, further solidifying its leadership position in the U.S. energy market.
- Corporate Responsibility and Reputation: Sempra's recognition in The Wall Street Journal's Management Top 250 and Fortune's World's Most Admired Companies highlights its leadership in responsible business practices and high-performance culture.
See More
Sempra Declares $0.6575 Quarterly Dividend for Shareholders
- Quarterly Dividend Announcement: Sempra's board has declared a quarterly dividend of $0.6575 per share, payable on July 15, 2026, to shareholders of record as of June 25, 2026, demonstrating the company's ongoing commitment to shareholder returns.
- Shareholder Return Strategy: This dividend payment reflects Sempra's strong performance in maintaining stable cash flow and profitability, aimed at boosting investor confidence and attracting more long-term investors.
- Growth Vision: Sempra is focused on becoming America's leading utility growth business, particularly in California and Texas, by electrifying and enhancing energy resilience to drive business development.
- Industry Recognition: The company is recognized for its responsible business practices and high-performance culture, being included in The Wall Street Journal's Management Top 250 and Fortune's World's Most Admired Companies, further solidifying its market position.
See More
Sempra Declares Quarterly Dividend of $0.6575 per Share
- Quarterly Dividend Declaration: Sempra has declared a quarterly dividend of $0.6575 per share, consistent with previous distributions, indicating the company's stable cash flow and shareholder return strategy.
- Dividend Yield: The forward yield of 2.84% provides investors with a relatively stable income source, enhancing the attractiveness of the company's stock in the market.
- Payment Schedule: The dividend will be payable on July 15, with a record date of June 25 and an ex-dividend date also set for June 25, ensuring shareholders receive timely returns.
- Future Outlook: Sempra affirms its adjusted EPS guidance for 2026 to be between $4.80 and $5.30, demonstrating confidence in future growth despite missing top-line estimates, which reflects the company's strategic positioning.
See More
Voss Capital Proposes Sempra Spin-Off of Oncor Electric Unit
- Spin-Off Proposal: Activist investor Voss Capital has proposed that Sempra spin off its Texas electric unit, Oncor, believing that an independent Oncor could become the highest-growth public transmission utility in the U.S., potentially reaching a valuation of $78 billion by the end of 2028.
- Market Potential: Voss Capital, which owns approximately 2 million shares of Sempra, argues that the value of Sempra's 80% stake in Oncor could exceed its current market capitalization of $59 billion, indicating significant market potential.
- Business Structure Optimization: With Sempra operating three distinct businesses—Southern California utilities, Oncor, and Sempra Infrastructure—spinning off Oncor could enhance its business structure and improve overall operational efficiency.
- Market Reaction: While Oncor has not provided immediate comments and Sempra has not responded to the request for comment, the growing attention on the spin-off proposal may influence future stock price movements.
See More
Voss Capital Urges Sempra to Spin Off Oncor Electricity Unit
- Spin-Off Proposal: Activist investor Voss Capital has urged Sempra to spin off its Oncor electricity unit, arguing that an independent Oncor would become the highest-growth public transmission utility in the U.S., potentially reaching a valuation of $78 billion by 2028, thereby enhancing investor clarity regarding the company's structure.
- Market Potential: Voss highlighted that Sempra controls approximately 80% of Oncor, and a spin-off would result in Oncor's valuation exceeding Sempra's current market value, indicating that separation could create a clearer value proposition for investors.
- Risk Management: An independent Oncor would be insulated from the wildfire risks that have severely impacted California utilities over the past decade, which Voss believes will attract more investor support for the spin-off proposal.
- Growing Power Demand: Texas is projected to see significant increases in power demand in the coming years, with the Electric Reliability Council forecasting peak electricity demand to rise from 98,087 megawatts in 2026 to 111,318 megawatts by 2032, positioning Oncor as a key player in meeting this demand.
See More
The Potential and Challenges of Coal's Revival
- Surging Market Demand: Babcock & Wilcox (B & W) currently holds a $2.7 billion backlog, with $2.4 billion stemming from its partnership with Applied Digital, indicating a robust growth in power demand driven by the data center boom, which may lead to a revival of coal.
- Significant Stock Performance: B & W's stock has surged 244% over the past year, rising from below $1 to $21, reflecting optimistic market expectations for its future growth potential, despite facing controversies related to Applied Digital.
- Policy Support for Coal: President Trump and the Energy Secretary are actively working to prevent the closure of coal plants, viewing coal as a vital national security resource, which could provide new business opportunities for companies like B & W, despite ongoing environmental concerns.
- Changing Competitive Landscape: B & W possesses unique capabilities in building natural gas power plants, and with GE Vernova currently at capacity, B & W's expansion potential may position it favorably in the future energy market, particularly in the combined use of coal and natural gas.
See More
Sempra Declares Quarterly Dividend of $0.6575 per Share
- Quarterly Dividend Announcement: Sempra's board has declared a quarterly dividend of $0.6575 per share, payable on July 15, 2026, to shareholders of record as of June 25, 2026, demonstrating the company's ongoing commitment to shareholder returns.
- Shareholder Return Strategy: This dividend payment reflects Sempra's strong performance in maintaining stable cash flow and profitability, aimed at boosting investor confidence and attracting more long-term investors.
- Leadership in Energy Network: As one of North America's largest energy networks, Sempra plays a crucial role in enhancing electricity supply and energy resilience in California and Texas, further solidifying its leadership position in the U.S. energy market.
- Corporate Responsibility and Reputation: Sempra's recognition in The Wall Street Journal's Management Top 250 and Fortune's World's Most Admired Companies highlights its leadership in responsible business practices and high-performance culture.
See More
Sempra Declares $0.6575 Quarterly Dividend for Shareholders
- Quarterly Dividend Announcement: Sempra's board has declared a quarterly dividend of $0.6575 per share, payable on July 15, 2026, to shareholders of record as of June 25, 2026, demonstrating the company's ongoing commitment to shareholder returns.
- Shareholder Return Strategy: This dividend payment reflects Sempra's strong performance in maintaining stable cash flow and profitability, aimed at boosting investor confidence and attracting more long-term investors.
- Growth Vision: Sempra is focused on becoming America's leading utility growth business, particularly in California and Texas, by electrifying and enhancing energy resilience to drive business development.
- Industry Recognition: The company is recognized for its responsible business practices and high-performance culture, being included in The Wall Street Journal's Management Top 250 and Fortune's World's Most Admired Companies, further solidifying its market position.
See More
Sempra Declares Quarterly Dividend of $0.6575 per Share
- Quarterly Dividend Declaration: Sempra has declared a quarterly dividend of $0.6575 per share, consistent with previous distributions, indicating the company's stable cash flow and shareholder return strategy.
- Dividend Yield: The forward yield of 2.84% provides investors with a relatively stable income source, enhancing the attractiveness of the company's stock in the market.
- Payment Schedule: The dividend will be payable on July 15, with a record date of June 25 and an ex-dividend date also set for June 25, ensuring shareholders receive timely returns.
- Future Outlook: Sempra affirms its adjusted EPS guidance for 2026 to be between $4.80 and $5.30, demonstrating confidence in future growth despite missing top-line estimates, which reflects the company's strategic positioning.
See More
