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CenterPoint Energy Inc. CNP, with its rising earnings estimates, strategic investments and strong return on equity (ROE), offers a great investment opportunity in the utility sector.

Let us focus on the reasons that make this Zacks Rank #2 (Buy) stock a robust investment pick at the moment.

Growth Projections & Surprise History

The Zacks Consensus Estimate for CenterPoint Energy’s second-quarter 2024 earnings per share (EPS) has increased 2.9% to 35 cents per share in the past 60 days. The Zacks Consensus Estimate for CNP’s revenues for 2024 stands at $8.78 billion, which indicates growth of 1% from the 2023 reported figure.

The company’s long-term (three to five years) earnings growth is pegged at 7%. It delivered an average earnings surprise of 3.13% in the last four quarters.

Return on Equity

Return on equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, CNP’s ROE is 10.57% compared with the industry’s 9.72%. This indicates that the company has been utilizing its funds more constructively than its peers in the industry.

Solvency & Liquidity

CenterPoint Energy’s times interest earned ratio (TIE) at the end of the first quarter of 2024 was 2.5. The TIE ratio of more than 1 indicates that the company will be able to meet its interest payment obligations in the near term without any problems.

CNP’s current ratio at the end of the first quarter of 2024 was 1.25, higher than the industry’s average of 0.85. The ratio, being greater than one, indicates the company’s ability to meet its future short-term liabilities without difficulties.

Dividend History

CenterPoint Energy has been increasing shareholder value through steady dividend payments. In April 2024, CNP announced a quarterly dividend of 20 cents per share, which resulted in an annual dividend of 80 cents per share. The company's current dividend yield is 2.64%, better than the Zacks S&P 500 composite’s yield of 1.25%.

Systematic Investments

CenterPoint Energy invests consistently in upgrading and maintaining its infrastructure while also expanding operations. The company's capital expenditure plan over the next five to 10 years is $21.3 billion and $44.5 billion, respectively, with an investment aim of $3.7 billion in 2024. Strengthening its electric operation will be the primary use for a major portion of the proposed investment.

Price Performance

In the past six months, CNP shares have risen 3.7% compared with the industry’s growth of 2.1%.

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Other Stocks to Consider

Some other top-ranked stocks from the same industry are PPL Corporation PPL, Consolidated Edison ED and Portland General Electric POR, each holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

PPL’s long-term earnings growth rate is 6.8%. The Zacks Consensus Estimate for PPL’s 2024 sales is pegged at $8.77 billion, which indicates a year-over-year improvement of 5.5%.

ED’s long-term earnings growth rate is 7.4%. The Zacks Consensus Estimate for the company's 2024 sales is pegged at $15.11 billion, which implies a year-over-year improvement of 3.1%.

The Zacks Consensus Estimate for POR’s 2024 EPS implies a year-over-year improvement of 29.8%. The Zacks Consensus Estimate for the company's 2024 sales is pegged at $3.22 billion, which suggests year-over-year growth of 10.2%.

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