CenterPoint Energy, Inc. Fundamental Analysis (NYSE: CNP)
CenterPoint Energy, Inc. (NYSE: CNP) shows moderate financial fundamentals with a PE ratio of 24.04, profit margin of 11.61%, and ROE of 9.85%. The company generates $9.6B in annual revenue with moderate year-over-year growth of 8.26%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 26.3/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze CNP's fundamental strength across five key dimensions:
Efficiency Score
WeakCNP struggles to generate sufficient returns from assets.
Valuation Score
ExcellentCNP trades at attractive valuation levels.
Growth Score
ModerateCNP shows steady but slowing expansion.
Financial Health Score
ModerateCNP shows balanced financial health with some risks.
Profitability Score
WeakCNP struggles to sustain strong margins.
Key Financial Metrics
Is CNP Expensive or Cheap?
P/E Ratio
CNP trades at 24.04 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, CNP's PEG of 1.27 indicates fair valuation.
Price to Book
The market values CenterPoint Energy, Inc. at 2.29 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 0.47 times EBITDA. This is generally considered low.
How Well Does CNP Make Money?
Net Profit Margin
For every $100 in sales, CenterPoint Energy, Inc. keeps $11.61 as profit after all expenses.
Operating Margin
Core operations generate 23.24 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $9.85 in profit for every $100 of shareholder equity.
ROA
CenterPoint Energy, Inc. generates $2.32 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
CenterPoint Energy, Inc. generates strong operating cash flow of $2.58B, reflecting robust business health.
Free Cash Flow
CenterPoint Energy, Inc. generates weak or negative free cash flow of $-2.70B, restricting financial flexibility.
FCF Per Share
Each share generates $-4.10 in free cash annually.
FCF Yield
CNP converts -10.03% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
24.04
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.27
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.29
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.80
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
2.14
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.12
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.10
vs 25 benchmark
ROA
Return on assets percentage
0.02
vs 25 benchmark
ROCE
Return on capital employed
0.05
vs 25 benchmark
How CNP Stacks Against Its Sector Peers
| Metric | CNP Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 24.04 | 20.43 | Worse (Expensive) |
| ROE | 9.85% | 1037.00% | Weak |
| Net Margin | 11.61% | -667.00% (disorted) | Strong |
| Debt/Equity | 2.14 | 1.68 | Weak (High Leverage) |
| Current Ratio | 1.12 | 1.72 | Neutral |
| ROA | 2.32% | 4578092.00% | Weak |
CNP outperforms its industry in 1 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews CenterPoint Energy, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
2.58%
Industry Style: Defensive, Dividend, Income
GrowingEPS CAGR
210.67%
Industry Style: Defensive, Dividend, Income
High GrowthFCF CAGR
1.34%
Industry Style: Defensive, Dividend, Income
Growing