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Reasons to Add CenterPoint (CNP) to Your Portfolio Right Now
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CenterPoint Energy, Inc.’s (CNP - Free Report) strategic investment plans will further expand its operations and help meet the increasing demand for its services. The company is focused on upgrading its infrastructure and improving reliability. Given its growth opportunities, CNP makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment option at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for CNP’s third-quarter 2023 earnings per share (EPS) has increased 5.7% to 37 cents in the past 90 days.
The Zacks Consensus Estimate for 2023 EPS is pinned at $1.49, indicating year-over-year growth of 8%.
CenterPoint’s long-term (three- to five-year) earnings growth rate is 7.51%. It delivered an average earnings surprise of 0.13% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, CenterPoint’s ROE is 9.72%, higher than the industry’s average of 5.43%. This indicates that the company has been utilizing its funds more constructively than its peers in the electric power utility industry.
Dividend History
The utility company has been consistently paying dividends to its shareholders. In September 2023, the CNP’s board of directors approved a dividend hike of 5.3%. This resulted in a quarterly dividend of 20 cents per share, up from the previous quarter’s 19 cents. This increase represents an annualized dividend of 80 cents per share. CenterPoint’s current dividend yield is 2.77%, better than the Zacks S&P 500 Composite’s 1.48%.
Systematic Investments
CenterPoint is investing substantially to upgrade its infrastructure and improve the reliability of its services. In the second quarter of 2023, the company increased its 2023 capital plan from $3.6 billion to $4 billion, indicating an increase of more than 11%. This also caused its 10-year capital investment plan to increase from $43 billion to $43.4 billion.
CNP’s capital plan is expected to witness a CAGR of approximately 11% through 2025 due to such investment plans. The company’s planned capital expenditure on growth projects will enable it to deliver an industry-leading growth rate of 8% annually through the 2023-2024 period.
Price Performance
In the past year, CNP’s shares have risen 7.5% against the industry’s average decline of 7.5%.
The Zacks Consensus Estimate for VST’s 2023 EPS indicates a year-over-year improvement of 220.4%. The same for sales indicates a year-over-year increase of 47.8%.
ALE’s long-term earnings growth rate is 8.1%. The Zacks Consensus Estimate for the company’s 2023 EPS implies year-over-year growth of 8.6%.
OGE’s long-term earnings growth rate is 3.65%. It delivered an average earnings surprise of 3.8% in the last four quarters.
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Reasons to Add CenterPoint (CNP) to Your Portfolio Right Now
CenterPoint Energy, Inc.’s (CNP - Free Report) strategic investment plans will further expand its operations and help meet the increasing demand for its services. The company is focused on upgrading its infrastructure and improving reliability. Given its growth opportunities, CNP makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment option at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for CNP’s third-quarter 2023 earnings per share (EPS) has increased 5.7% to 37 cents in the past 90 days.
The Zacks Consensus Estimate for 2023 EPS is pinned at $1.49, indicating year-over-year growth of 8%.
CenterPoint’s long-term (three- to five-year) earnings growth rate is 7.51%. It delivered an average earnings surprise of 0.13% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, CenterPoint’s ROE is 9.72%, higher than the industry’s average of 5.43%. This indicates that the company has been utilizing its funds more constructively than its peers in the electric power utility industry.
Dividend History
The utility company has been consistently paying dividends to its shareholders. In September 2023, the CNP’s board of directors approved a dividend hike of 5.3%. This resulted in a quarterly dividend of 20 cents per share, up from the previous quarter’s 19 cents. This increase represents an annualized dividend of 80 cents per share. CenterPoint’s current dividend yield is 2.77%, better than the Zacks S&P 500 Composite’s 1.48%.
Systematic Investments
CenterPoint is investing substantially to upgrade its infrastructure and improve the reliability of its services. In the second quarter of 2023, the company increased its 2023 capital plan from $3.6 billion to $4 billion, indicating an increase of more than 11%. This also caused its 10-year capital investment plan to increase from $43 billion to $43.4 billion.
CNP’s capital plan is expected to witness a CAGR of approximately 11% through 2025 due to such investment plans. The company’s planned capital expenditure on growth projects will enable it to deliver an industry-leading growth rate of 8% annually through the 2023-2024 period.
Price Performance
In the past year, CNP’s shares have risen 7.5% against the industry’s average decline of 7.5%.
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Other Stocks to Consider
A few other top-ranked stocks from the same industry are Vistra Corp. (VST - Free Report) , currently sporting a Zacks Rank #1 (Strong Buy), and ALLETE (ALE - Free Report) and OGE Energy Corp. (OGE - Free Report) , each holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for VST’s 2023 EPS indicates a year-over-year improvement of 220.4%. The same for sales indicates a year-over-year increase of 47.8%.
ALE’s long-term earnings growth rate is 8.1%. The Zacks Consensus Estimate for the company’s 2023 EPS implies year-over-year growth of 8.6%.
OGE’s long-term earnings growth rate is 3.65%. It delivered an average earnings surprise of 3.8% in the last four quarters.