SRE vs XEL: Dividend Yield, Growth & Safety Comparison
Sempra (SRE) and Xcel Energy Inc (XEL) are both in the Utilities sector, making them natural rivals for dividend investors. Both stocks offer similar yields — SRE at 2.85% and XEL at 2.94%. For dividend growth, XEL leads with a 5-year CAGR of 11.5% versus SRE's 4.1%. Both stocks carry a "Moderate" dividend safety rating. SRE is a Dividend Contender with 15 years of consecutive increases.
Key Metrics Comparison
| Metric | SRE | XEL |
|---|
| Dividend Yield | 2.85% | 2.94% |
| Annual Dividend | $2.56 | $2.28 |
| 5-Year CAGR | 4.1% | 11.5% |
| Payout Ratio | 79% | 67% |
| Consecutive Years | 15 | 1 |
| Price | $94.71 | $81.32 |
Yield Comparison
Xcel Energy Inc (XEL) currently yields 2.94%, which is solid for the broader market. That's 0.09% more than Sempra (SRE), which yields 2.85%. In dollar terms, XEL pays $2.28/share annually versus SRE's $2.56/share.
Dividend Growth
Over the past five years, XEL has grown its dividend at a 11.5% CAGR compared to SRE's 4.1%. SRE: Dividend growth has been steady, with a 3-year CAGR of 4.1% and a 5-year CAGR of 4.1% (10-year: 6.1%). XEL: Dividend growth is accelerating — the 3-year CAGR of 16.6% exceeds the 5-year rate of 11.5% and the 10-year rate of 8.5%.
Dividend Safety
SRE's dividend safety is rated "Moderate." The payout ratio of 79% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.3x. XEL's dividend safety is rated "Moderate." The payout ratio of 67% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.5x. XEL's payout ratio of 67% is more conservative than SRE's 79%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in XEL generates approximately $294/year in dividend income, compared to $285/year from SRE — a difference of $9/year. At $100,000, that gap widens to $90/year.
Verdict
- Best for income: XEL
- Best for growth: XEL
- Best for safety: XEL
Frequently Asked Questions
Which has a higher dividend yield, SRE or XEL?
Xcel Energy Inc (XEL) has a higher dividend yield of 2.94% compared to Sempra (SRE) at 2.85%.
Is SRE or XEL a better dividend growth stock?
Xcel Energy Inc has the stronger dividend growth with a 5-year CAGR of 11.5%, compared to Sempra's 4.1%.
Which is safer for dividend income, SRE or XEL?
Sempra's dividend safety is rated "Moderate" while Xcel Energy Inc is rated "Moderate." The payout ratio of 79% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.3x. The payout ratio of 67% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.5x.
How much income does $10,000 in SRE vs XEL generate?
A $10,000 investment in SRE generates approximately $285/year in dividends, while the same amount in XEL generates about $294/year.
Is SRE or XEL a Dividend Aristocrat?
Sempra is a Dividend Contender with 15 consecutive years of increases. Xcel Energy Inc does not currently qualify for aristocrat status.
Which has a lower payout ratio, SRE or XEL?
Xcel Energy Inc has a lower payout ratio of 67% compared to Sempra's 79%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
SRE vs XEL: which is better for retirement income?
It depends on your priorities. XEL for current income, XEL for dividend growth, XEL for safety. Many retirement investors hold both for diversification.
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