Zacks_Analysts' Blog : CenterPoint Raises Dividend - Analyst Blog

CenterPoint Energy Inc. (CNP) has increased its quarterly dividend to share more benefits with its shareholders, as it did in January 2011. The company increased its dividend by 2.5%, bringing the annualized dividend to 81 cents per share from the previous payout of 79 cents per share. The increment reflects the company’s commitment towards its shareholders and its ability to deliver sustainable earnings and cash flow.

Following the hike, the company will now pay a quarterly dividend of 20.25 cents compared to its previous payout of 19.75 cents. The dividend will be paid on March 9, 2012, to shareholders of record as of the close of business on February 16, 2012.

The company has been able to increase its dividend for the seventh consecutive year. Last January, the company had increased its quarterly dividend by 1.28% to 19.75 cents per share.

CenterPoint Energy with its balanced portfolio of electric and natural gas businesses provides a diversified risk profile, along with stable earnings and cash flow. The company believes that in the near term it requires cash to fulfill its dividend payment, capital expenditure requirements and interest payments on debt. It believes that the capital expenditures will maintain reliability and safety as well as help in expanding the systems through value-added projects.

Going forward, key growth drivers for the company include stable regulated operations, higher rates, ongoing infrastructure development projects and a strong balance sheet.

However, the positives are partially offset by some pending regulatory cases including the outcome of the Texas rate case, the tepid economy, lower demand for electricity, falling wholesale natural gas prices and a significant presence in a hurricane prone section of the U.S. Like its peers, American Electric Power Company (AEP) and Xcel Energy Inc. (XEL), CenterPoint Energy also presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

CenterPoint Energy is expected to release its earnings on February 29, 2012. The Zacks Consensus Estimates for fourth quarter 2011 and fiscal year 2011 are currently at 18 cents per share and $1.13 per share, respectively.

Based in Houston, Texas, CenterPoint Energy, Inc. is a domestic energy delivery company that includes electric transmission & distribution, natural gas distribution, competitive natural gas sales and services, interstate pipelines, and field services operations. The company serves more than five million metered customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma and Texas.