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CenterPoint Energy: Buy This High-Growth Utility On Dips


  • CenterPoint Energy, Inc. is a large electric and natural gas utility that operates in various states throughout the central part of the country.
  • The company enjoys a very stable cash flow over time, which is something that could be very useful in a weak economy.
  • The company is positioned to deliver reasonably strong growth through the end of the decade.
  • CenterPoint Energy has a reasonably strong balance sheet and the dividend is well-covered.
  • CenterPoint Energy, Inc. looks a bit expensive relative to its peers.
  • Looking for a helping hand in the market? Members of Energy Profits in Dividends get exclusive ideas and guidance to navigate any climate. Learn More »

Corn Field & Power Line


CenterPoint Energy, Inc. (NYSE:CNP) is a regulated electric and natural gas utility that serves customers throughout various states in the central part of the country. The utility sector has long been a favorite among conservative investors, such as retirees, due

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This article was written by

Power Hedge profile picture

Power Hedge has been covering both traditional and renewable energy since 2010. He targets primarily international companies of all sizes that hold a competitive advantage and pay dividends with strong yields.

He is the leader of the investing group Energy Profits in Dividends where he focuses on generating income through energy stocks and CEFs while managing risk through options. He also provides micro and macro-analysis of both domestic and international energy companie. Learn more.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (10)

I appreciated the information and analysis in your article. Two points however.

1. When 100 year, 500 year, 1,000 year weather events are now a monthly if not weekly occurrence, and you are assessing the relevance of such events to the future of investments, isn't there a little hubris to passing such risks off as 100 year events we are unlikely to see again? Admittedly a minor note in your overall analysis, but just the same.

2. Yield. I have owned CNP for 15 years, and on my basis, the yield is quite good. All that being said, in 2019 this stock was range limited to a high $29 - low $30 share price, while paying .29 per qrtr dividend; and now we have a stock that has been trading for the most part at a clearly over $30 price while paying .18 and .19 per qrtr dividend. If you could offer some insight into that (to my mind fairly fundamental) shift I am all ears.
Uain53 profile picture
@paulinthesouth "When 100 year, 500 year, 1,000 year weather events are now a monthly if not weekly occurrence"...... Source?
Look at IBD from 1/04/2018. Just one data point on insurance companies pushing this meme to justify increased rates. By the way, USA official weather records only go back to 1870. Tree rings, etc. may give local insights going back several hundred years or more.
Net; Disorganized thinking by the media equating increasing storm, flood damage to changing climate is easy to refute.
HINT: Insurance companies can be a good investment, but stay away from those that do business in ill-considered growth areas.... that are prone to hurricanes, tornadoes and floods ..... due to the ill-considered growth.
Long... ORI
atom profile picture
Over the years I have supplemented the CNP dividend with income generated from covered calls. To do that successfully, one must pick the spot at which to sell a covered call, but it can be done fairly successfully if one follows the pattern of CNP price action.
Cnp is really expensive for a now standalone electric utility that has a lot of debt, facing recessionary and inflationary pressures. Utilities should be yielding 5% minimum for income investors in this market...CNP is do for a correction back to low 20's if not the teens. We have seen it before, I'm a shareholder for over 20 years.
@lappygums agreed - 2.3% yield at a 30% payout ratio. IMO, their earnings would need to increase by 80% to justify their current price.
@lappygums -- CNP is not a standalone electric utility. They have both gas and electric operations, as pointed out in the article. They provide gas service where I live, and both gas and electric nearby. RSR
I was refering to the sale of ENBL- the midstream operation.whic was one of the reasons this was a high flyer back in the day.
Uain53 profile picture
They cut their dividend in 2020 after purchasing Vectren in 2019. I sold some back then but held a partial postion since.
They cut their div. A couple years ago
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