In this article, we will look at Jim Cramer’s top 2 LNG stock picks for the “long haul”. If you want to read about why the LNG market is becoming a lucrative investment opportunity right now, you can go to Jim Cramer Recommends These 5 LNG Stocks for the “Long Haul”.
2. Sempra (NYSE:SRE)
Number of Hedge Fund Holders: 29
Sempra (NYSE:SRE) is a leading North American natural gas and electric utility company. Jim Cramer is bullish on Sempra (NYSE:SRE) and views the stock as a more diversified LNG play. Cramer noted that he “is waiting for a pullback” to buy the stock and that Sempra (NYSE:SRE) reported a strong quarter. The journalist investor also said that “this is the right time to own a utility”.
On August 4, Sempra (NYSE:SRE) announced earnings for the second quarter of fiscal 2022. The company reported earnings per share of $1.98 and beat estimates by $0.21. The company generated a revenue of $3.55 billion, up 29.4% year over year, and beat Wall Street consensus by $546 million. As of September 12, Sempra (NYSE:SRE) has gained 33.4% year to date.
On September 8, Sempra (NYSE:SRE) declared a quarterly cash dividend of $1.145 per share. The dividend is payable on October 15 to shareholders of record on September 23. As of September 12, Sempra (NYSE:SRE) is offering a forward dividend yield of 2.78%.
On July 14, Sempra (NYSE:SRE) announced a collaboration with ConocoPhillips (NYSE:COP) to develop Sempra’s (NYSE:SRE) Port Arthur LNG project. Shortly after the announcement, BofA analyst Paul Zimbardo upgraded Sempra (NYSE:SRE) to Buy from Neutral noting that the risk-reward ratio for the stock is attractive and that he is bullish on the company’s LNG development.
At the end of Q2 2022, 29 hedge funds were bullish on Sempra (NYSE:SRE) and held stakes worth $285 million in the company. This is compared to 23 positions in the preceding quarter with stakes worth $209.15 million. The hedge fund sentiment for the stock is positive.
As of June 30, Millennium Management is the top shareholder in Sempra (NYSE:SRE) and has stakes worth $123 million in the company.
Here is what ClearBridge Investments had to say about Sempra (NYSE:SRE) in its first-quarter 2022 investor letter:
“Energy shortages in Europe were only intensified by the invasion. The conflict and economic sanctions against Russia have brought to the forefront EU dependence on Russian oil and natural gas. As Germany and its EU neighbors look to diversify their natural gas suppliers, some U.S. companies stand to benefit. Within the portfolio, Sempra Energy (NYSE:SRE) is well-positioned. Sempra’s previously underappreciated portfolio of infrastructure assets, with existing as well as prospective liquified natural gas (LNG) facilities, should benefit from renewed interest in U.S.-sourced LNG. The U.S. commitment to increase LNG exports to Europe over the coming years should create a favorable long-term demand environment and hopefully regulatory framework benefiting Sempra along with other natural gas and LNG suppliers. Sempra’s core utilities operations in California and Texas continue to generate solid mid- to high-single-digit earnings growth, and it enjoys additional growth opportunities from renewable natural gas (RNG), hydrogen and other renewable sources of energy.”
