July 18, 2025 a 11:31 am
CNP: Dividend Analysis - CenterPoint Energy, Inc.
CenterPoint Energy, Inc. stands as a significant player in the utilities sector, noted for its robust dividend history spanning over 56 years. Despite recent fluctuations in its dividend growth rate, the company maintains a stable payout ratio, ensuring consistent income streams to its investors. As it navigates through the complexities of market dynamics, CenterPoint's financial stability and strategic management decisions reflect its commitment to long-term shareholder value.
📊 Overview
An overview of CenterPoint Energy’s dividend attributes highlights its prominent role in the utilities sector. With a reasonable dividend yield of 2.82% and a current dividend per share at $0.81, investors can anticipate steady returns. The company's established dividend history of 56 years underscores its commitment to shareholder value without recent suspensions.
| Sector | Dividend Yield | Current Dividend per Share | Dividend History | Last Cut/Suspension |
|---|---|---|---|---|
| Utilities | 2.82% | $0.81 | 56 years | None |
🗣️ Dividend History
Analyzing the dividend history reveals consistency and reliability, core proponents for long-term investment strategies. This reliability enhances investor confidence in sustained, predictable returns.
| Year | Dividend per Share |
|---|---|
| 2025 | $0.44 |
| 2024 | $0.81 |
| 2023 | $0.77 |
| 2022 | $0.70 |
| 2021 | $0.65 |
📈 Dividend Growth
Understanding dividend growth is critical for evaluating future income potential. Over the past three years, CenterPoint Energy’s dividend growth stands at 7.61%, indicating resilience despite a 5-year decline of 6.77%.
| Time | Growth |
|---|---|
| 3 years | 7.61% |
| 5 years | -6.77% |
The average dividend growth is -6.77% over 5 years. This shows moderate but steady dividend growth in recent years.
⚠️ Payout Ratio
The payout ratio is pivotal in assessing affordability and sustainability of dividends. CenterPoint Energy's EPS-based payout ratio is 54.78%, indicating a balanced approach between rewarding shareholders and retaining earnings for growth. However, a negative -19.66% FCF-based payout ratio suggests challenges in covering dividends strictly from free cash flow.
| Key Figure | Ratio |
|---|---|
| EPS-based | 54.78% |
| Free cash flow-based | -19.66% |
While the EPS payout ratio is acceptable, the FCF basis indicates a dependency on earning reinvestments or borrowing to sustain existing dividend payouts.
💰 Cashflow & Capital Efficiency
Assessing cash flow dynamics and capital efficiency is crucial for maintaining both operational liquidity and investment momentum. CenterPoint Energy reports negative free cash flow yields and relatively high CAPEX to operating cash flow ratios, which impact overall cash flow equilibrium.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield (%) | -11.63% | -2.91% | -13.82% |
| Earnings Yield | 4.99% | 5.09% | 5.60% |
| CAPEX to Operating Cash Flow | 2.11 | 1.14 | 2.44 |
| Stock-based Compensation to Revenue | 0% | 0% | 0.55% |
| Free Cash Flow / Operating Cash Flow Ratio | -1.11 | -0.14 | -1.44 |
The negative Free Cash Flow trends denote potential hurdles for operational liquidity and funding future growth endeavors internally.
🔍 Balance Sheet & Leverage Analysis
Evaluating leverage metrics is essential in understanding a company's risk profile and financial sustainability. CenterPoint’s debt ratios reflect considerable leverage with a Debt-to-Equity ratio nearing 2, positioning it to effectively manage obligations while maintaining growth.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.97 | 1.93 | 1.68 |
| Debt-to-Assets | 0.48 | 0.47 | 0.44 |
| Debt-to-Capital | 0.66 | 0.66 | 0.63 |
| Net Debt to EBITDA | 6.00 | 5.81 | 5.20 |
| Current Ratio | 1.08 | 0.78 | 0.92 |
| Quick Ratio | 0.91 | 0.58 | 0.75 |
| Financial Leverage | 4.10 | 4.11 | 3.84 |
The relatively high leverage ratios necessitate prudent financial strategies to mitigate interest rate risks and ensure sustainable capital structuring.
✅ Fundamental Strength & Profitability
Fundamental strengths and profitability metrics signify operational efficiency and financial performance. Despite variations, CenterPoint Energy's profitability indicators remain stable, complimented by substantial margins.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 9.55% | 9.49% | 10.52% |
| Return on Assets | 2.33% | 2.31% | 2.74% |
| Return on Invested Capital | 4.15% | 4.02% | 3.29% |
| Net Margin | 11.79% | 10.55% | 11.34% |
| EBIT Margin | 23.74% | 20.56% | 20.82% |
| EBITDA Margin | 40.39% | 36.67% | 34.65% |
| Gross Margin | 46.00% | 42.39% | 36.44% |
| Research & Development to Revenue | 0% | 0% | 0% |
The stable profitability metrics underline CenterPoint’s effective cost management and strategic foresight in enhancing shareholder value.
📉 Price Development
📊 Dividend Scoring System
| Category | Score | Score Bar |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 4 | |
| Dividend Growth | 2 | |
| Payout Ratio | 3 | |
| Financial Stability | 3 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 2 | |
| Balance Sheet Quality | 3 |
Overall Score: 25/40
⭐ Rating
CenterPoint Energy, Inc. presents a mixed but generally resilient dividend profile. Despite some challenges in dividend growth and cash flow metrics, the company exhibits strong dividend stability and payout continuity, making it a viable option for income-focused investors seeking long-term stability in their portfolios.