CenterPoint Energy Inc (CNP) stock analysis

P/E above its 5-year median

CenterPoint Energy's P/E of 23.4 is above its own 5-year median of 21.7.

P/E above the industry

CenterPoint Energy's P/E of 23.4 is above the Electric Services median of 20.9.

EV/EBITDA above its 5-year median

CenterPoint Energy's EV/EBITDA of 12.2 is above its 5-year median of 12.1.

P/B above the industry

CenterPoint Energy's price-to-book of 2.31 is above the Electric Services median of 2.02.

Trading above fair value

The share price of $41.00 is above our fair value estimate of $36.84.

Margin of safety under 20%

The price is 11.3% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 0.1% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 0.2% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing faster than the industry

Revenue grew 7.8% over the last twelve months; the Electric Services median is 7.8%.

Guidance issued

The latest outlook (2027 non-GAAP EPS, Oct 27, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin improving

Gross margin was 100.0% over the last twelve months, against 99.9% a year earlier.

Return on equity under 15%

Return on equity was 10.1% over the last twelve months and averaged 11.3% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 5.9%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

CenterPoint Energy's return on equity of 10.1% is above the Electric Services median of 8.3%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin below its 5-year average

Net margin was 11.8% over the last twelve months, against a 5-year average of 12.5%.

Net margin above the industry

CenterPoint Energy's net margin of 11.8% is above the Electric Services median of 8.8%.

High debt

Debt is 202% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 161% five years ago to 202%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 11.9% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense 2.3 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.15 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 0.88; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

CenterPoint Energy paid dividends worth 2.2% of the share price over the last twelve months.

Yield below Treasuries

The 2.2% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; CenterPoint Energy yields 2.2%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 8 fiscal years.

Covered by earnings

Dividends take 52.3% of net income.

Cash-flow cover

Needs dividends paid and free cash flow.