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Reasons to Add CenterPoint (CNP) to Your Portfolio Right Now

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CenterPoint Energy, Inc. (CNP - Free Report) operates as an electric and natural gas utility company. It provides electric and natural gas services to customers in Texas. CenterPoint is registering growth in customer volumes, and investing substantially to expand operations as well as meet increasing utility demand.

Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Growth Projections

The Zacks Consensus Estimate for 2021 and 2022 earnings per share is pegged at $1.43 and $1.49, respectively. The 2021 and 2022 estimates indicate year-over-year growth of 2.1% and 4.2%, respectively.

The Zacks Consensus Estimate for 2021 and 2022 revenues is pegged at $7.77 billion and $7.98 billion, indicating year-over-year growth of 4.8% and 2.7%, respectively.

Regular Investments

CenterPoint Energy makes consistent investments to upgrade and maintain the existing infrastructure as well as expand operations. The company invested nearly $2.6 billion in 2020 and anticipates investing $16.73 billion from 2021 through 2025. These funds will be utilized primarily to maintain reliability and safety, increase resiliency as well as expand CenterPoint’s systems through value-added projects. The company expects this systematic investment to drive 6-8% annual earnings growth through 2025.

Regular Dividend & Long-Term Earnings Growth

Currently, CenterPoint has a dividend yield of 2.6%, higher than the Zacks S&P 500 composite’s average of 1.33%. The company, after cutting dividend rate in first-half 2020 to preserve liquidity, raised annualized dividend rate by nearly 6.7% at the end of second-half 2020. CenterPoint targets an annual dividend growth in the range of 6-8%.

The company’s long-term (three to five years) earnings growth is currently pegged at 4.8%.

Return on Equity (ROE)

ROE is the measure of a company’s efficiency in utilizing shareholders’ funds. CenterPoint has a trailing 12-month ROE of 16.59%, better than the industry average of 9.62%.

Price Performance

In the past six months, the stock has gained 13.5% compared with the industry’s growth of 0.9%.

 

Zacks Investment ResearchImage Source: Zacks Investment Research

 

Other Stocks to Consider

Other top-ranked stocks in the same sector include Xcel Energy (XEL - Free Report) , Hawaiian Electric Industries, Inc. (HE - Free Report) and Entergy Corporation (ETR - Free Report) , currently having a Zacks Rank #2.

Xcel Energy, Hawaiian Electric Industries and Entergy pay regular dividends, thereby ensuring steady income for investors. The current dividend yield of Xcel Energy, Hawaiian Electric Industries and Entergy is 2.7%, 3.2% and 3.7%, respectively.

The Zacks Consensus Estimate for 2021 earnings for Xcel Energy, Hawaiian Electric Industries and Entergy has moved up 0.7%, 8.8% and 0.2%, respectively, in the past 60 days.

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