CNP - CenterPoint Energy's Growth Offsets Increased Share Issuance

2024-03-20 05:34:44 ET

Summary

• CenterPoint Energy shares have underperformed in the past year, but the company has favorable geographic positioning and potential for dividend growth.
• Bond yields have a significant impact on utility stocks like CenterPoint Energy, and interest rate movements can drive share price performance.
• The company's financial performance has been solid, with earnings and dividends rising in 2023, and it is focused on growing its rate base in the high-growth Texas market.
• That said, increased equity issuance does increase the risk dividend growth comes in at the low end of long-term targets.

Shares of CenterPoint Energy ( CNP ) have been a poor performer over the past year, essentially treading water during what has been a strong bull market run. Since recommending shares as a “buy” in November , CNP has continued to trade flat, lagging the S&P 500’s double-digit return. I continue to believe the company has very favorable geographic positioning and is poised for solid dividend growth, though recent developments have been somewhat mixed. On balance, I still view shares as a buy....

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