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Wall Street JournalHere's Why You Must Add CenterPoint Stock to Your Portfolio Now
CenterPoint Energy Inc. CNP, with its rising earnings estimates, strategic investments, robust ROE, better solvency and strong dividend history, offers a great investment opportunity in the Zacks Utility Electric Power industry.
Let us focus on the reasons that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
CNP’s Growth Projections & Surprise History
The Zacks Consensus Estimate for CenterPoint Energy’s 2025 earnings per share (EPS) has increased 0.6% to $1.75 per share in the past 60 days. The Zacks Consensus Estimate for CNP’s revenues for 2025 stands at $8.80 billion, which indicates growth of 1.8% from the 2024 reported figure.
The company’s long-term (three to five years) earnings growth rate is pegged at 7.1%. It delivered an average earnings surprise of 0.76% in the last four quarters.
CNP’s Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, CNP’s ROE is 10.02% compared with the industry’s 9.89%. This indicates that the company has been utilizing its funds more constructively than its peers in the industry.
CNP’s Solvency & Liquidity
CenterPoint Energy’s times interest earned ratio (TIE) at the end of the fourth quarter of 2024 was 2.4. The TIE ratio of more than 1 indicates that the company will be able to meet its interest payment obligations in the near term without any problems.
CNP’s current ratio at the end of the fourth quarter of 2024 was 1.08, higher than the industry’s average of 0.73. The ratio, being greater than one, indicates the company’s ability to meet its future short-term liabilities without difficulties.
Dividend History of CNP
CenterPoint Energy has been increasing shareholder value by steadily paying dividends. Currently, the company’s quarterly dividend is 22 cents per share, resulting in an annualized dividend of 88 cents. The company’s current dividend yield is 2.55%, better than the Zacks S&P 500 Composite's average of 1.30%.
CNP’s Systematic Investments
CenterPoint Energy consistently invests in upgrading and maintaining its infrastructure while expanding operations. The company's capital expenditure plan over the next 10 years is $47 billion to $47.5 billion, with an investment aim of $4.8 billion in 2025. Such investments should improve the company’s customer reliability and provide safe, resilient energy.
CNP Stock Price Performance
In the past three months, CNP shares have risen 8.1% compared with the industry’s growth of 1.9%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are CMS Energy Corporation CMS, NiSource Inc. NI and Ameren Corporation AEE, each holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CMS’ long-term earnings growth rate is 7.7%. The Zacks Consensus Estimate for 2025 EPS is pegged at $3.60, which indicates a year-over-year improvement of 7.8%.
NI’s long-term earnings growth rate is 8.2%. The Zacks Consensus Estimate for 2025 EPS is pegged at $1.91, which suggests a year-over-year rise of 9.1%.
AEE’s long-term earnings growth rate is 6.7%. The Zacks Consensus Estimate for 2025 EPS is pegged at $4.94, which calls for a year-over-year improvement of 6.7%.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Ameren Corporation (AEE): Free Stock Analysis Report
NiSource, Inc (NI): Free Stock Analysis Report
CMS Energy Corporation (CMS): Free Stock Analysis Report
CenterPoint Energy, Inc. (CNP): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).