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CenterPoint Energy (CNP) Well Poised on Solid Capex Plan
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We issued an updated research report on energy provider, CenterPoint Energy, Inc. (CNP - Free Report) on Jun 5. The company boasts a stable financial position, which, in turn, allows it to invest steadily in expanding its operations to cope with increasing utility demand.
CenterPoint Energy continues with its capital outlay of $7 billion from 2017 through 2021. The company still targets 4–6% annual EPS growth or more than the upper end of the range through 2018, inclusive of Midstream Investments.
Under the Electric Transmission & Distribution division, the corporation plans to invest $4.1 billion through the 2017–2021 period for system modernization initiatives, maintenance projects and installation of meter-reading technology.
Additionally, the company’s capital expenditure program is also aimed at replacing aging infrastructure, development of the Minnesota Belt Line Project and public improvement requirements. These initiatives will enable CenterPoint Energy to provide reliable services besides meeting increasing customer demand.
In fact, a steady growth in customer count has mainly driven CenterPoint Energy’s performance over the last several quarters. In the first quarter of 2017, the company’s Electric Transmission & Distribution segment’s customer count rose 2% while that in the gas utilities business was up 1%.
This trend has allowed the company to outperform its broader industry. Over the last 12 months, CenterPoint Energy’s shares have gained 23.3% compared with the Zacks categorized utility-Electric Power industry’s gain of 1.1%.
Moreover, a favorable financial position also supports CenterPoint Energy’s practice of paying regular dividends. In the first quarter of 2017, the company paid $115 million as dividends to its shareholders, up from $110 million paid in the year-ago period.
On the flip side, the stock currently has a trailing 12-month EV/EBITDA ratio of 9.2, much higher than the average level of 6.4 and in line with its high of 9.2 over this period. This shows that the company is overvalued when compared to its historical levels.
Also, the company faces intense competition from other utilities in the market like Alliant Energy Corporation (LNT - Free Report) , Consolidated Edison, Inc. (ED - Free Report) and NiSource, Inc. (NI - Free Report) .
At Zacks, we're mostly focused on short-term profit cycles, but the hottest of all technology mega-trends is starting to take hold...
By last year, it was already generating $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for those who make the right trades early. See Zacks' Top 3 Stocks to Ride This Space >>
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CenterPoint Energy (CNP) Well Poised on Solid Capex Plan
We issued an updated research report on energy provider, CenterPoint Energy, Inc. (CNP - Free Report) on Jun 5. The company boasts a stable financial position, which, in turn, allows it to invest steadily in expanding its operations to cope with increasing utility demand.
CenterPoint Energy continues with its capital outlay of $7 billion from 2017 through 2021. The company still targets 4–6% annual EPS growth or more than the upper end of the range through 2018, inclusive of Midstream Investments.
Under the Electric Transmission & Distribution division, the corporation plans to invest $4.1 billion through the 2017–2021 period for system modernization initiatives, maintenance projects and installation of meter-reading technology.
Additionally, the company’s capital expenditure program is also aimed at replacing aging infrastructure, development of the Minnesota Belt Line Project and public improvement requirements. These initiatives will enable CenterPoint Energy to provide reliable services besides meeting increasing customer demand.
In fact, a steady growth in customer count has mainly driven CenterPoint Energy’s performance over the last several quarters. In the first quarter of 2017, the company’s Electric Transmission & Distribution segment’s customer count rose 2% while that in the gas utilities business was up 1%.
This trend has allowed the company to outperform its broader industry. Over the last 12 months, CenterPoint Energy’s shares have gained 23.3% compared with the Zacks categorized utility-Electric Power industry’s gain of 1.1%.
Moreover, a favorable financial position also supports CenterPoint Energy’s practice of paying regular dividends. In the first quarter of 2017, the company paid $115 million as dividends to its shareholders, up from $110 million paid in the year-ago period.
On the flip side, the stock currently has a trailing 12-month EV/EBITDA ratio of 9.2, much higher than the average level of 6.4 and in line with its high of 9.2 over this period. This shows that the company is overvalued when compared to its historical levels.
Also, the company faces intense competition from other utilities in the market like Alliant Energy Corporation (LNT - Free Report) , Consolidated Edison, Inc. (ED - Free Report) and NiSource, Inc. (NI - Free Report) .
Zacks Rank
CenterPoint currently holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3 Stocks to Ride a 588% Revenue Explosion
At Zacks, we're mostly focused on short-term profit cycles, but the hottest of all technology mega-trends is starting to take hold...
By last year, it was already generating $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for those who make the right trades early. See Zacks' Top 3 Stocks to Ride This Space >>