Tags: CenterPoint | Energy | dividend | CNP

CenterPoint Energy Offers Diversity, Dividend

By    |   Monday, 31 Oct 2011 12:39 PM

Beefy dividends and utilities go hand in hand. So investors have snapped them up this year, driving prices higher. CenterPoint Energy (CNP), one of the largest electric and natural gas providers in the United States, sports a 3.8 percent dividend and a diversity of income sources. Its stock price has soared 32 percent this year. Competitor Dominion Resources (D), which yields 3.9 percent, has risen 19 percent.

CenterPoint Energy prospers from its diversified portfolio, add analysts. The Texas company gets 45 percent of its operating income from electric transmission and distribution services to a growing market of more than 2 million customers in Houston and Galveston, Texas.

The natural gas subsidiary has 3.2 million customers in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas. To prime reserves, CenterPoint Energy has invested in the gas-laden Haynesville Shale, which runs along parts of Louisiana, Texas and Arkansas.

Steady cash flow, a strong balance sheet and a supportive regulatory environment add oomph. CenterPoint Energy’s second-quarter revenues rose 4.6 percent to $1.8 billion versus $1.76 billion a year ago. Electricity services posted a 7.8 percent revenue gain. For the quarter, company profits rose 47 percent.

Cost recovery

Of the 15 analysts followed by Thomson/First Call, three have strong buy recommendations on CenterPoint Energy and seven have buys, with five holds.

Jefferies has a hold rating on the company, citing a tentative agreement with the Texas Public Utility Commission for recovery of $1.695 billion in its stranded-cost true-up case. Analysts add that this amount is within expectations.

The company reports next Nov. 2.

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Beefy dividends and utilities go hand in hand. So investors have snapped them up this year, driving prices higher. CenterPoint Energy (CNP), one of the largest electric and natural gas providers in the United States, sports a 3.8 percent dividend and a diversity of income...
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2011-39-31
Monday, 31 Oct 2011 12:39 PM
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