CenterPoint Energy plans $250 million stock sale
HOUSTON – CenterPoint Energy, Inc. (NYSE: NYSE:) has announced its intention to launch an underwritten public offering of $250 million in common stock shares, subject to market and other conditions. The Houston-based energy delivery company aims to direct the net proceeds from this sale towards general corporate expenses, which include repaying a portion of its outstanding commercial paper. This commercial paper was previously utilized for various corporate requirements, including working capital.
Barclays Capital Inc. and Citigroup will serve as the joint book-running managers and underwriters for the stock offering. The sale will occur under CenterPoint Energy’s existing shelf registration statement with the Securities and Exchange Commission (SEC), and will be conducted through a prospectus and a related prospectus supplement as mandated by the Securities Act of 1933.
The company’s common stock is traded on the New York Stock Exchange and the NYSE Chicago, bearing the ticker symbol CNP. This planned offering does not equate to an offer to sell or a solicitation to buy any securities, and there will be no sales in jurisdictions where such activities would violate registration or qualification requirements under the applicable securities laws.
CenterPoint Energy, which stands as the sole investor-owned electric and utility headquartered in Texas, operates across several states including Indiana, Louisiana, Minnesota, Mississippi, Ohio, and Texas, providing services to over 7 million metered customers. As of June 30, 2024, CenterPoint Energy reported owning assets worth approximately $41 billion and employs around 9,000 individuals. The company and its predecessors have a history extending over 150 years in the energy sector.
In other recent news, CenterPoint Energy has faced several changes. The company’s handling of Hurricane Beryl brought about criticism and regulatory scrutiny, leading to a downgrade from JPMorgan and a lowered price target. Other firms including KeyBanc Capital Markets and BMO Capital also adjusted their ratings due to the company’s withdrawal of its Houston Electric rate case and the System Resiliency Plan from the Public Utility Commission of Texas’ review, introducing regulatory uncertainty.
CenterPoint Energy has been navigating these challenges while maintaining steady financial performance. In the second quarter of 2024, the company matched earnings per share expectations and reaffirmed its full-year 2024 non-GAAP EPS guidance range at $1.61 to $1.63.
In addition, the company invested $800 million in capital expenditures, received approval for their final settlement in Texas Gas jurisdictions, and is making progress with the sale of their Louisiana and Mississippi gas LDCs, expected to close in the first quarter of 2025. These are the recent developments that continue to shape CenterPoint Energy’s regulatory and financial future.
InvestingPro Insights
As CenterPoint Energy (NYSE: CNP) prepares for its public offering of common stock, investors may consider the current financial health and market performance of the company. With a market capitalization of $16.5 billion and a price-to-earnings (P/E) ratio standing at 15.96, the company appears to be trading at a reasonable valuation relative to its near-term earnings growth. Interestingly, the P/E ratio has seen a slight uptick in the last twelve months as of Q2 2024, reaching 16.09.
One of the notable InvestingPro Tips for CNP highlights that the stock is currently trading near its 52-week low, which could potentially offer an attractive entry point for value investors. Additionally, the company has maintained a commendable track record of dividend payments, having done so for 54 consecutive years, with a dividend yield of 3.1% as of the latest data in 2024.
Despite recent challenges reflected in the revenue growth, which saw a decrease of 7.56% in the last twelve months as of Q2 2024, the company’s gross profit margin remains strong at 46.42%. This could indicate efficient operations and cost management. Moreover, CenterPoint Energy has been profitable over the past twelve months, with a solid operating income margin of 22.13%.
For investors seeking further insights, there are additional tips available on InvestingPro, which provide a deeper analysis into CenterPoint Energy’s financials and market performance. As of now, there are 9 more InvestingPro Tips that can be explored for a comprehensive understanding of CNP’s investment potential.
These metrics and insights could be particularly relevant for investors considering participation in the upcoming stock offering or for those reevaluating their current investment in CenterPoint Energy.
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