Sempra

The forensic scores give a mixed but not alarming picture. The Beneish M-Score is -3.115, which is below -1.78 and therefore not in the elevated manipulation-risk zone. This is a screening test built from financial-statement ratios, so a reading in this zone lowers the concern without ruling out problems. The Piotroski F-Score is 5 of 7 computable signals, a middle-to-solid result across profitability, leverage and efficiency tests. The operating cash flow to net income ratio is 2.48, meaning 2025 operating cash flow was about 2.5 times reported net income. That gap is wide, and readers may want to look at what drove it, since the same ratio was 0.53 in 2022 ($1.14 billion divided by $2.14 billion). Revenue grew 5.1% to $12.42 billion in 2025, and total assets rose from $96.16 billion to $110.88 billion, while equity moved only from $31.22 billion to $31.59 billion. That asset growth was not matched by equity growth, so the company relies more heavily on debt and other liabilities to fund its build-out. The filings describe a regulated utility strategy centered on California and Texas, including SDG&E, SoCalGas and the Oncor interest. Q1 2026 results improved, but the filing attributes a meaningful part of the Sempra Infrastructure gain to unrealized derivative gains and a tax benefit from held-for-sale classification, which are not steady operating drivers. Readers may want to compare the Q1 segment results with the full-year 2025 trend, and to read the held-for-sale and capital recycling disclosures, before drawing conclusions about the direction of earnings.

Catalyst.Earnings attributable to common shares rose to $1,037 million in the three months ended March 31, 2026, from $906 million a year earlier. Sempra Infrastructure contributed most of the increase, up $116 million, including $58 million from unrealized commodity derivative gains and a $35 million net income tax benefit tied to classifying SI Partners and Ecogas as held for sale. Sempra Texas Utilities rose $25 million on higher equity earnings from Oncor Holdings, driven by the UTM established in June 2025, the SRP, and rate updates for invested capital. In Sempra California, electric revenues rose $165 million (16%), mainly from capital projects, including $59 million recognized on approved WMP capital projects.

Hidden risk.Full-year 2025 net income was $1.84 billion, down from $2.86 billion in 2024, and operating cash flow fell from $4.91 billion to $4.57 billion. Cash flow is also volatile: operating cash flow was only $1.14 billion in 2022, against net income of $2.14 billion that year. The risk factors tie the five-year capital expenditures plan and Oncor's capital plan to significant liquidity needs, and ring-fencing measures limit Sempra's ability to influence Oncor, in which it holds an 80.25% interest. Wildfire exposure in California is also listed as a separate risk.