On Jun 13, we issued an updated research report on
CenterPoint Energy, Inc.
). The utility company's strong financial position, methodical
investment in electricity transmission and distribution, favorable
natural gas ventures and stable customer gains are expected to spur
future growth significantly. However, volatility in wholesale
and over-dependence on retail electric providers for rate payments
might pose considerable challenges to the company in the future.
CenterPoint Energy, a Zacks Rank #2 (Buy) stock, reported strong
results in first-quarter 2014. Both earnings as well as revenues
surpassed the Zacks Consensus Estimates and improved year over
year, primarily on the back of a severe winter and higher share
CenterPoint Energy maintained a favorable liquidity position backed
by a stable cash generation capacity. As of Mar 31, 2014, the
company's cash balance stood at around $0.38 billion and $1.2
billion of revolving credit facility. In the first quarter,
CenterPoint Energy's cash flow from operating activities totaled
CenterPoint Energy continues to add customers at its service
regions, mainly on the back of steady economic improvement. An
increase in customer base and an improvement in utility
consumptions are expected to drive revenues.
CenterPoint Energy is currently expanding its operations to meet
increasing demand. Additionally, the company intends to invest $1.4
billion in its capital spending program in 2014. A major portion of
the funds is expected to be allocated toward system modernization
initiatives and maintenance projects.
On the downside, CenterPoint Energy's natural gas distribution
segment is sensitive to volatility in natural gas prices. Thus,
lack of stability in natural gas prices and lower wholesale
opportunities might impact the company's future performance.
Key Picks from the Sector
Other well-performing stocks in the utility sector worth
Korea Electric Power Corporation
NRG Energy, Inc.
). All the stocks carry a Zacks Rank #1 (Strong Buy).
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CENTERPOINT EGY (CNP): Free Stock Analysis
ENTERGY CORP (ETR): Free Stock Analysis Report
KOREA ELEC PWR (KEP): Free Stock Analysis
NRG ENERGY INC (NRG): Free Stock Analysis
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