Why CNP Stock Is Positioned for Strong Performance in Today's Energy Market

CenterPoint Energy (CNP) stands to benefit significantly from the ongoing electrification wave sweeping through transportation and buildings, coupled with substantial renewable energy investments across the sector. The company’s disciplined capital management and robust growth trajectory make it a compelling choice within the utility-electric power space. Here’s what investors need to know about this Zacks Rank #2 recommendation.

Financial Growth Trajectory

CenterPoint Energy’s earnings momentum looks particularly solid heading into 2025. Wall Street consensus projects the company’s earnings per share to reach $1.76, reflecting an 8.64% year-over-year increase. Revenue expectations sit at $9.18 billion, up 6.16% annually. Looking ahead, management has guided for long-term EPS expansion between 7-9% each year, with independent analysis suggesting a three-to-five-year earnings growth rate of 7.93%.

Capital Deployment and Rate Base Expansion

The company has established an ambitious $65 billion capital investment framework spanning a decade, with an additional $10 billion in identified growth opportunities on the horizon. This strategic approach positions CNP to achieve rate base growth exceeding 11% annually through 2030. The company anticipates recovering approximately 85% of these capital investments through forward test year rate cases and interim regulatory trackers by the end of the decade.

Shareholder Returns Through Dividends

CNP has demonstrated consistent commitment to returning value to shareholders via dividend distributions. The quarterly payment stands at 22 cents per share, translating to an 88-cent annual dividend. At 2.19%, the current dividend yield outpaces the broader S&P 500 average of 1.10%, offering attractive income for yield-focused investors.

Operational Efficiency and Financial Health

The company’s Return on Equity registers at 10.25%, surpassing the industry median of 9.95%, which demonstrates superior capital efficiency in generating shareholder returns. On the debt serviceability front, CNP’s times interest earned ratio came in at 2.3 in Q3 2025, a metric that gauges the company’s capacity to comfortably manage its long-term debt obligations through operating earnings.

Market Performance Context

Over the past twelve months, CNP shares have appreciated 28%, outpacing the utility-electric power sector’s 20.6% gain, indicating strong relative strength and investor confidence in the company’s execution.

Alternative Opportunities in the Same Space

Other highly-rated utilities warrant consideration: FirstEnergy (FE) projects long-term earnings growth of 6.46% with 2025 EPS consensus of $2.54 (down 3.42% YoY); Ameren (AEE) targets 8.01% long-term growth with 2025 EPS of $4.99 (up 7.78% YoY); and Alliant Energy (LNT) anticipates 6.57% long-term expansion with projected 2025 EPS of $3.21 (up 5.59% YoY). All three carry Zacks Rank #2 ratings.