July 20, 2025 a 12:46 pm
CNP: Dividend Analysis - CenterPoint Energy, Inc.
CenterPoint Energy, Inc., with its robust operational framework and longstanding history in the sector, stands as a formidable entity in the energy market. The company's dividend profile, highlighted by its dividend yield of 2.82% and a remarkable 56-year history of consistent dividend payments, positions it as a potentially attractive investment for dividend-focused investors. Despite some recent fluctuations in dividend growth, the firm's adherence to maintaining payouts reflects stability in an otherwise volatile sector.
Overview 📊
CenterPoint Energy operates within a dynamic sector, characterized by its moderate yield and enduring commitment to dividend payments. This overview provides insight into its current payout metrics and historical performance, underscoring its appeal to income-focused investors.
| Metric | Value |
|---|---|
| Sector | Utilities |
| Dividend Yield | 2.82% |
| Current Dividend Per Share | 0.81 USD |
| Dividend History | 56 years |
| Last Cut or Suspension | None |
Dividend History 🗣️
CenterPoint Energy's historical dividend data reflects its strong commitment to long-term shareholder returns. A track record extending over five decades signifies resilience and reliability in shareholder remuneration practices.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 0.44 |
| 2024 | 0.81 |
| 2023 | 0.77 |
| 2022 | 0.70 |
| 2021 | 0.65 |
Dividend Growth 📈
Analyzing the dividend growth provides clarity on potential future distributions. While recent growth has been modest, the five-year period indicates a negative trend, necessitating cautious optimism for future enhancements.
| Time | Growth |
|---|---|
| 3 years | 7.61% |
| 5 years | -6.77% |
The average dividend growth is -6.77% over 5 years. This shows moderate but unstable dividend growth.
Payout Ratio ⚠️
Payout ratios evaluate the sustainability of dividends. CenterPoint's EPS-based payout ratio appears comfortable, yet negative FCF raises concerns about long-term distribution capabilities without operational improvements.
| Key Figure | Ratio |
|---|---|
| EPS-based | 54.78% |
| Free Cash Flow-based | -19.66% |
The EPS payout ratio of 54.78% suggests stability in earnings coverage, but the negative FCF-based payout indicates financial strain, warranting close observation of operating cash improvements.
Cashflow & Capital Efficiency 🔍
Cashflow metrics provide insight into operational efficiency and capital deployment. Current figures highlight negative free cash flow yield and a high CAPEX ratio, indicating potential liquidity constraints.
| Metric/Year | 2022 | 2023 | 2024 |
|---|---|---|---|
| Free Cash Flow Yield | -13.82% | -2.91% | -11.63% |
| Earnings Yield | 5.60% | 5.09% | 4.99% |
| CAPEX to Operating Cash Flow | 244.14% | 113.52% | 210.99% |
| Stock-based Compensation to Revenue | 0.55% | 0% | 0% |
| Free Cash Flow / Operating Cash Flow Ratio | -144.14% | -13.52% | -110.99% |
Despite stable earnings yields, the negative free cash flow and significant CAPEX to operating ratio suggest potential liquidity issues, emphasizing the importance of financial restructuring for sustainable growth.
Balance Sheet & Leverage Analysis 📉
The balance sheet's robustness reflects a company's capacity to manage liabilities. CenterPoint showcases a high debt profile juxtaposed with a stable but modest liquidity position.
| Metric/Year | 2022 | 2023 | 2024 |
|---|---|---|---|
| Debt-to-Equity | 1.68 | 1.93 | 1.96 |
| Debt-to-Assets | 0.44 | 0.47 | 0.48 |
| Debt-to-Capital | 0.63 | 0.66 | 0.66 |
| Net Debt to EBITDA | 5.20 | 5.81 | 6.00 |
| Current Ratio | 0.92 | 0.78 | 1.08 |
| Quick Ratio | 0.75 | 0.58 | 0.91 |
| Financial Leverage | 3.84 | 4.11 | 4.10 |
The escalating debt ratios alongside modest coverage metrics highlight the potential constraints on financial agility. An emphasis on deleveraging may be necessary to bolster future stability.
Fundamental Strength & Profitability ✅
Profitability metrics reflect the company's ability to deliver shareholder value. A consistent but narrow return profile indicates operational efficiency but reflects challenges in margin expansion.
| Metric/Year | 2022 | 2023 | 2024 |
|---|---|---|---|
| Return on Equity | 10.52% | 9.49% | 9.55% |
| Return on Assets | 2.74% | 2.31% | 2.33% |
| Return on Invested Capital | 3.29% | 4.02% | 4.15% |
| Net Margin | 11.34% | 10.55% | 11.79% |
| EBIT Margin | 20.82% | 20.56% | 23.74% |
| EBITDA Margin | 34.65% | 36.67% | 40.39% |
| Gross Margin | 36.44% | 42.39% | 46.00% |
| Research & Development to Revenue | 0% | 0% | 0% |
While CenterPoint exhibits a commendable efficiency in capital deployment, margins suggest room for improvement. Strengthening core profitability would enhance overall stakeholder value.
Price Development 🏷️
Dividend Scoring System 🔖
| Criteria | 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. exhibits a solid dividend history, supported by a reasonable yield and continuity. However, challenges in growth dynamics and leverage necessitate cautious analysis. Investors prioritizing income may find value, though attention should be given to operational improvements for long-term sustainability.