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4 Reasons to Hold CenterPoint Energy (CNP) in Your Portfolio

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Estimates for CenterPoint Energy, Inc. (CNP - Free Report) have been revised upward in the past 90 days, which reflects analysts’ optimism in the stock. The Zacks Consensus Estimate for 2018 and 2019 earnings have inched up 1.6% and 0.6% to $1.61 and $1.69, respectively.

Shares of CenterPoint have returned 9.2% in the past three months compared with the industry’s rise of 5.7%. The company carries a Zacks Rank #3 (Hold).


Let’s focus on the factors that make CenterPoint a stock to retain.

Surprise Trend & Year-Over-Year Growth Estimates

CenterPoint pulled off an average positive earnings surprise of 17.06 % in the last four quarters. Year-over-year earnings growth for 2018 and 2018 is estimated at 17.52% and 4.86%, respectively.

Dividend Yield & Long-Term Growth

A stable financial position enables CenterPoint to raise shareholders’ value through the payment of regular dividends and repurchase of shares. The company is paying dividend since 1990 and has hiked the same on an annual basis since 2005. The company’s current dividend yield is 3.86%, higher than the industry’s 3.20% and S&P 500 composite’s 1.78%. Expected long-term growth of the company pegged at 5.70%.

VGM Score

CenterPoint has an impressive VGM Score of A. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors. Back tested results show that stocks with a favorable VGM Score of A or B coupled with a bullish Zacks Rank are the best investment options.

Investment Plan

CenterPoint’s steady growth in customer count has majorly driven performance in the last several quarters. The company expects to make significant investments, which will be utilized primarily to maintain reliability and safety, increase resiliency as well as enhance its systems through value-added projects. Under the Electric Transmission & Distribution division, CenterPoint Energy plans to invest roughly $4.8 billion through the 2018-2022 periods.

Stocks to Consider

A few better-ranked stocks from the same space are FirstEnergy Corporation (FE - Free Report) , IDACORP, Inc (IDA - Free Report) and DTE Energy Company (DTE - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

FirstEnergy delivered an average positive earnings surprise of 4.74% in the last four quarters. The Zacks Consensus Estimate for 2018 and 2019 earnings moved up 3.0% and 0.4% in the past 60 days, respectively.

IDACORP delivered an average positive earnings surprise of 10.10% in the last four quarters. The Zacks Consensus Estimate for 2018 and 2019 earnings inched up 2.1% and 0.9% in the past 60 days, respectively.

DTE Energy pulled off an average positive earnings surprise of 5.69% in the last four quarters. The Zacks Consensus Estimate for 2018 and 2019 earnings moved up 6.7% and 3.6% in the past 60 days, respectively.

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