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CenterPoint Energy, Inc. powers millions of homes and businesses across the United States, delivering essential electric and natural gas services that underpin daily life and economic activity. As a major utility holding company, CenterPoint stands out for its extensive transmission infrastructure and diverse energy solutions, blending reliability with innovation in a transforming energy landscape. As we analyze its current fundamentals, the key question remains: does CenterPoint’s solid market position and steady dividend justify its valuation and future growth prospects?
Table of contents
Business Model & Company Overview
CenterPoint Energy, Inc., founded in 1866 and headquartered in Houston, Texas, stands as a major player in the U.S. utilities sector. Its business is built around a comprehensive ecosystem of electric transmission, distribution, and natural gas services, delivering energy solutions to approximately 2.7M metered customers. The company operates a vast infrastructure, including 239 substations and over 100,000 miles of natural gas mains, positioning itself as a backbone of essential utility services.
The company’s revenue engine balances electric transmission and generation with regulated natural gas distribution and ancillary services like home appliance maintenance and repair. This diversified revenue mix spans multiple U.S. regions, including Minnesota, Arkansas, Texas, and Louisiana, ensuring broad geographic exposure. CenterPoint’s extensive asset base and regulated operations provide a durable economic moat, reinforcing its role in shaping the future of energy infrastructure.
Financial Performance & Fundamental Metrics
I will analyze CenterPoint Energy, Inc.’s income statement, key financial ratios, and dividend payout policy to provide a clear view of its fundamental strength.
Income Statement
The table below summarizes CenterPoint Energy, Inc.’s key income statement figures for the fiscal years 2020 through 2024 in USD.
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| Revenue | 7.42B | 8.35B | 9.32B | 8.70B | 8.64B |
| Cost of Revenue | 4.49B | 5.15B | 5.92B | 5.01B | 4.67B |
| Operating Expenses | 1.89B | 1.84B | 1.83B | 1.93B | 1.99B |
| Gross Profit | 2.93B | 3.21B | 3.40B | 3.69B | 3.98B |
| EBITDA | 2.28B | 2.62B | 3.23B | 3.19B | 3.49B |
| EBIT | 1.09B | 1.31B | 1.94B | 1.79B | 2.05B |
| Interest Expense | 529M | 529M | 524M | 701M | 838M |
| Net Income | -773M | 1.49B | 1.06B | 917M | 1.02B |
| EPS | -1.79 | 2.35 | 1.60 | 1.37 | 1.58 |
| Filing Date | 2021-02-25 | 2022-02-22 | 2023-02-17 | 2024-02-20 | 2025-02-20 |
Income Statement Evolution
Over the 2020-2024 period, CenterPoint Energy, Inc. saw a favorable 16.5% revenue growth overall, despite a slight 0.61% decline from 2023 to 2024. Net income surged by 231.8% overall, with an 11.8% increase in net margin in the last year, reflecting improved profitability. Gross margin remained strong at 46.0%, while EBIT margin rose to 23.7%, indicating enhanced operational efficiency.
Is the Income Statement Favorable?
In 2024, revenue slightly decreased to $8.64B, but gross profit increased by 7.9%, driven by better cost management. EBIT grew 14.8% to $2.05B, with net income reaching $1.02B and net margin at 11.8%, all favorable signals. Interest expense was neutral at 9.7% of revenue. Overall, 78.6% of income statement metrics were favorable, supporting a generally positive assessment of the company’s financial health.
Financial Ratios
The table below summarizes key financial ratios for CenterPoint Energy, Inc. over the last five fiscal years, providing insight into profitability, efficiency, liquidity, leverage, and shareholder returns:
| Ratios | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Margin | -10% | 18% | 11% | 11% | 12% |
| ROE | -9% | 16% | 11% | 9% | 10% |
| ROIC | 3% | 3% | 3% | 4% | 4% |
| P/E | -15 | 11 | 18 | 20 | 20 |
| P/B | 1.38 | 1.76 | 1.88 | 1.86 | 1.91 |
| Current Ratio | 0.61 | 1.72 | 0.92 | 0.78 | 1.08 |
| Quick Ratio | 0.50 | 1.57 | 0.75 | 0.58 | 0.91 |
| D/E | 1.61 | 1.71 | 1.68 | 1.93 | 1.97 |
| Debt-to-Assets | 40% | 43% | 44% | 47% | 48% |
| Interest Coverage | 2.0 | 2.6 | 3.0 | 2.5 | 2.4 |
| Asset Turnover | 0.22 | 0.22 | 0.24 | 0.22 | 0.20 |
| Fixed Asset Turnover | 0.33 | 0.36 | 0.34 | 0.29 | 0.27 |
| Dividend Yield | 4.6% | 3.0% | 2.6% | 3.0% | 2.6% |
Evolution of Financial Ratios
From 2020 to 2024, CenterPoint Energy’s Return on Equity (ROE) showed significant fluctuation, improving from a negative in 2020 to 9.55% in 2024, though still considered unfavorable. The Current Ratio improved from 0.61 in 2020 to 1.08 in 2024, indicating better liquidity but remaining neutral. The Debt-to-Equity Ratio increased to 1.97 in 2024, maintaining a high leverage level deemed unfavorable, while profitability margins have stabilized positively.
Are the Financial Ratios Favorable?
In 2024, profitability shows mixed signals: net margin (11.79%) and dividend yield (2.56%) are favorable, but ROE (9.55%) and return on invested capital (4.15%) remain unfavorable. Liquidity ratios like Current Ratio (1.08) and Quick Ratio (0.91) are neutral, suggesting adequate short-term financial health. Leverage remains high with a Debt-to-Equity of 1.97, unfavorable for risk-averse investors. Market valuation ratios such as P/E (20.03) and P/B (1.91) are neutral, reflecting moderate market expectations. Overall, the global ratio assessment is slightly unfavorable.
Shareholder Return Policy
CenterPoint Energy, Inc. maintains a consistent dividend payout with a 2024 ratio of 51%, yielding 2.56% annually and a dividend per share of $0.81. Despite negative free cash flow per share, the company balances distributions with moderate share buybacks, supported by operating cash flow coverage below unity.
This dividend approach, alongside buybacks, suggests a commitment to shareholder returns supported by earnings, yet the negative free cash flow signals caution. The policy appears aimed at maintaining sustainable long-term value, but investors should monitor cash flow trends and debt leverage for potential risks.
Score analysis
The following radar chart presents a comprehensive overview of CenterPoint Energy, Inc.’s key financial scores:
CenterPoint Energy shows a mixed profile with very unfavorable scores in discounted cash flow and debt-to-equity ratio, while return on equity and return on assets are moderate. Price-to-earnings and price-to-book ratios also reflect moderate valuations.
Analysis of the company’s bankruptcy risk
CenterPoint Energy’s Altman Z-Score places it in the distress zone, indicating a high risk of financial distress and potential bankruptcy:
Is the company in good financial health?
The Piotroski Score diagram illustrates CenterPoint Energy’s financial strength based on nine key accounting criteria:
With a Piotroski Score of 6, the company is considered to be in average financial health, suggesting moderate operational efficiency and financial stability.
Competitive Landscape & Sector Positioning
This section presents a detailed sector analysis of CenterPoint Energy, Inc., covering strategic positioning, revenue by segment, key products, main competitors, competitive advantages, and SWOT analysis. I will examine whether CenterPoint Energy holds a competitive advantage over its peers in the utilities sector.
Strategic Positioning
CenterPoint Energy, Inc. maintains a balanced product portfolio with roughly equal revenue contributions from its Electric Transmission & Distribution and Natural Gas segments, generating approximately 4.6B and 4.0B USD respectively in 2024. Its operations are concentrated in the United States, serving 2.7M metered customers across several states.
Revenue by Segment
This pie chart illustrates CenterPoint Energy, Inc.’s revenue distribution by segment for the fiscal year 2024, highlighting the contribution of each business area.
In 2024, Electric Transmission & Distribution generated $4.59B, slightly surpassing the Natural Gas Segment at $4.05B. Over recent years, Electric Transmission & Distribution has shown steady growth from $2.34B in 2011, indicating increasing importance. Conversely, the Natural Gas Segment has fluctuated but remains a significant revenue source. The latest year shows a modest shift favoring electric transmission, suggesting a gradual diversification in CenterPoint’s revenue base.
Key Products & Brands
Below is an overview of CenterPoint Energy’s key products and brands by segment:
| Product | Description |
|---|---|
| Electric Transmission & Distribution | Provides electric transmission and distribution services, electric generation assets, and participates in the wholesale power market. |
| Natural Gas Segment | Offers natural gas distribution, home appliance maintenance and repair services, home repair protection plans, and regulated intrastate natural gas sales, transportation, and storage. |
CenterPoint Energy operates primarily through its Electric Transmission & Distribution and Natural Gas segments, serving millions of customers with essential utility services across multiple states.
Main Competitors
CenterPoint Energy, Inc. faces competition from a total of 34 companies, with the table below listing the top 10 leaders by market capitalization:
| Competitor | Market Cap. |
|---|---|
| GE Vernova Inc. | 184.4B |
| NextEra Energy, Inc. | 168.6B |
| Constellation Energy Corporation | 114.4B |
| The Southern Company | 95.9B |
| Duke Energy Corporation | 91.3B |
| American Electric Power Company, Inc. | 61.9B |
| Sempra | 58.6B |
| Vistra Corp. | 56.0B |
| Dominion Energy, Inc. | 50.6B |
| Exelon Corporation | 44.4B |
CenterPoint Energy, Inc. ranks 24th among 34 competitors with a market cap approximately 13.7% that of the leader, GE Vernova Inc. The company is positioned below both the average market cap of the top 10 competitors (92.6B) and the median market cap in the sector (29.6B). It maintains a narrow gap of +0.44% above its next closest competitor, indicating a closely contested market position.
Comparisons with competitors
Check out how we compare the company to its competitors:
Aucun article trouvé pour ces critères.
Does CNP have a competitive advantage?
CenterPoint Energy, Inc. currently demonstrates a slightly unfavorable competitive advantage as it is shedding value with a negative gap between ROIC and WACC, despite a growing ROIC trend. The company shows favorable profitability metrics with a 23.74% EBIT margin and an 11.79% net margin, supported by strong income statement growth overall, yet it is not consistently creating economic value above its cost of capital.
Looking ahead, CenterPoint’s electric and natural gas segments serve a broad customer base with a substantial infrastructure footprint, including over 1,00,000 miles of natural gas mains and 239 substations. Opportunities may arise from expanding its regulated intrastate gas sales, maintenance services, and possibly leveraging its existing assets in multiple U.S. states to capture new market segments or improve operational efficiencies.
SWOT Analysis
This analysis highlights CenterPoint Energy’s key internal and external factors to guide informed investment decisions.
Strengths
- Stable utility market position
- Favorable income margins
- Growing profitability metrics
Weaknesses
- High debt-to-equity ratio
- Below-average ROE and ROIC
- Low asset turnover
Opportunities
- Expansion in natural gas services
- Increasing demand for clean energy
- Potential operational efficiency gains
Threats
- Regulatory changes
- Market competition
- Economic downturn impacting energy demand
CenterPoint Energy benefits from strong margin performance and a solid customer base but faces financial leverage challenges. The company’s growth prospects in natural gas and clean energy are promising, yet risks from regulatory and market pressures require cautious monitoring. Strategic focus should balance growth initiatives with debt management and operational improvements.
Stock Price Action Analysis
The following weekly stock chart illustrates CenterPoint Energy, Inc.’s price movements and volatility over the past 100 weeks:
Trend Analysis
Over the past 12 months, CenterPoint Energy’s stock price increased by 41.33%, indicating a bullish trend. The trend shows deceleration despite a high standard deviation of 4.3, reflecting notable volatility. The price ranged between a low of 25.79 and a high of 39.98, with momentum slowing after reaching peaks.
Volume Analysis
In the last three months, trading volume has been increasing overall, with total buyer volume at 1.57B shares (53.25%) versus 1.36B seller volume, indicating buyer-driven activity. However, the most recent period (Nov 2025–Jan 2026) shows a slight seller dominance with only 41.87% buyer volume, suggesting cautious or mixed investor sentiment.
Target Prices
The target consensus for CenterPoint Energy, Inc. (CNP) indicates moderate upside potential.
| Target High | Target Low | Consensus |
|---|---|---|
| 47 | 37 | 41.5 |
Analysts expect the stock to trade between 37 and 47, with a consensus target of 41.5, suggesting cautious optimism about its near-term valuation.
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Analyst & Consumer Opinions
This section examines the latest analyst ratings and consumer feedback related to CenterPoint Energy, Inc. (CNP).
Stock Grades
Here are the latest verified grades for CenterPoint Energy, Inc. from major financial institutions and their recent updates:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Wells Fargo | Maintain | Overweight | 2026-01-20 |
| Barclays | Maintain | Equal Weight | 2026-01-15 |
| BMO Capital | Upgrade | Outperform | 2026-01-13 |
| UBS | Maintain | Buy | 2025-12-17 |
| Keybanc | Upgrade | Overweight | 2025-12-12 |
| JP Morgan | Maintain | Neutral | 2025-12-11 |
| Scotiabank | Maintain | Sector Outperform | 2025-10-24 |
| Barclays | Maintain | Equal Weight | 2025-10-21 |
| Morgan Stanley | Maintain | Equal Weight | 2025-10-21 |
| UBS | Maintain | Buy | 2025-10-10 |
The overall trend shows several institutions maintaining their ratings, with a few upgrades toward more positive grades such as Outperform and Overweight. This suggests a generally stable to slightly optimistic outlook among analysts.
Consumer Opinions
Consumers of CenterPoint Energy, Inc. express a mix of appreciation and concerns, reflecting the company’s impact on their daily lives.
| Positive Reviews | Negative Reviews |
|---|---|
| Reliable energy supply with minimal outages | Customer service response times can be slow |
| Competitive pricing compared to regional peers | Billing errors have been reported by some customers |
| User-friendly online account management | Limited renewable energy options available |
Overall, consumers praise CenterPoint Energy for dependable service and fair pricing but frequently note issues with customer support responsiveness and a desire for more sustainable energy solutions.
Risk Analysis
Below is a summary table highlighting key risks associated with CenterPoint Energy, Inc., assessing their likelihood and potential impact on investors:
| Category | Description | Probability | Impact |
|---|---|---|---|
| Financial Stability | Altman Z-Score in distress zone indicates bankruptcy risk. | High | High |
| Leverage Risk | High debt-to-equity ratio (1.97) increases financial risk. | High | Medium |
| Operational Efficiency | Low asset turnover and fixed asset turnover ratios. | Medium | Medium |
| Regulatory Risk | Utilities sector faces strict regulations and compliance costs. | Medium | High |
| Dividend Sustainability | Dividend yield favorable but payout may be pressured by debt. | Medium | Medium |
| Market Volatility | Beta of 0.584 suggests moderate stock price sensitivity. | Low | Low |
The most critical risks to monitor are financial stability and leverage due to the company’s Altman Z-Score of 0.79, which places it in the distress zone, signaling elevated bankruptcy risk. Coupled with a high debt-to-equity ratio near 2, this raises concerns about long-term solvency despite favorable dividend yield and moderate profit margins.
Should You Buy CenterPoint Energy, Inc.?
CenterPoint Energy, Inc. appears to be a company with improving profitability and operational efficiency, yet it faces a slightly unfavorable competitive moat and substantial leverage profile. While its financial health suggests moderate value creation, the overall rating of C+ could be seen as cautious in light of its distress-zone Altman Z-score.
Strength & Efficiency Pillars
CenterPoint Energy, Inc. displays solid profitability with a net margin of 11.79% and an EBIT margin of 23.74%, reflecting operational efficiency. Although the return on equity is moderate at 9.55% and ROIC stands at 4.15%, it falls short of the company’s WACC of 4.84%, indicating that it is currently not a value creator. Financial health shows mixed signals: the Altman Z-score of 0.79 places the firm in the distress zone, suggesting bankruptcy risk, while a Piotroski score of 6 denotes average financial strength. Dividend yield at 2.56% adds a favorable income component for investors.
Weaknesses and Drawbacks
Significant leverage concerns arise from a high debt-to-equity ratio of 1.97, classified as very unfavorable, which may amplify financial risk in volatile markets. Valuation metrics are neutral, with a P/E of 20.03 and P/B of 1.91, implying neither a clear discount nor premium. Liquidity ratios hover near neutrality (current ratio 1.08, quick ratio 0.91), offering limited cushion against short-term obligations. Recent market activity shows slight seller dominance at 41.87% buyer volume, creating short-term headwinds that could pressure the stock price.
Our Verdict about CenterPoint Energy, Inc.
CenterPoint Energy presents an unfavorable long-term fundamental profile due to its inability to generate returns exceeding its cost of capital and its distress-zone Altman Z-score. Despite a bullish overall stock trend with a 41.33% price appreciation over 12 months, recent market pressure characterized by seller dominance suggests caution. Consequently, while the company might appear interesting for income-focused investors, a wait-and-see approach could be prudent to secure a better entry point amid current risks.
Disclaimer: This content is for informational purposes only and does not constitute financial, investment, or other professional advice. Investing in financial markets involves a significant risk of loss, and past performance is not indicative of future results.
Additional Resources
- Rakuten Investment Management Inc. Buys New Shares in CenterPoint Energy, Inc. $CNP – MarketBeat (Jan 25, 2026)
- CenterPoint Energy, Inc. to Host Webcast of Fourth Quarter 2025 Earnings Conference Call on February 19, 2026 – GlobeNewswire (Jan 20, 2026)
- As Texas braces for ice, 3,300 workers stand by to keep Houston powered – Stock Titan (Jan 24, 2026)
- CenterPoint Energy, Inc. Announces Fourth Quarter 2025 Earnings Conference Call Details – Quiver Quantitative (Jan 20, 2026)
- How Good Is CenterPoint Energy, Inc. (NYSE:CNP), When It Comes To ROE? – Yahoo Finance (Jan 18, 2026)
For more information about CenterPoint Energy, Inc., please visit the official website: centerpointenergy.com
