On May 25th, 2023, financial news outlets reported that Dimensional Fund Advisors LP had decreased its holdings in CenterPoint Energy, Inc. (NYSE:CNP) by 1.2% during the fourth quarter of the previous year. According to the firm’s most recent 13F filing with the Securities and Exchange Commission, they owned approximately 0.39% of CenterPoint Energy’s stock after selling 31,323 shares during the period – a move that raises many questions.
CenterPoint Energy is a reputable provider of utilities in America; therefore, it is natural for investors and industry watchers to wonder why Dimensional Fund Advisors would reduce their holdings in such a company. However, this action is not necessarily surprising given recent events within the energy market. In an era where renewable energy sources are being adopted faster than ever before because of their positive impact on climate change, traditional power companies like CenterPoint Energy are facing significant challenges.
Regardless of this situation, there are several reasons why CenterPoint Energy remains attractive to investors, including its relatively stable financial performance in recent years and its commitment to innovation and replication of best practices across different geographic markets. This has caused several equities research analysts to recently comment on the company.
For instance, StockNews.com assumed coverage on CenterPoint Energy in a research note which stated that they had put an explanation “hold” rating on the stock but commended management for their prudence when diversifying into new markets beyond oil and gas explorations.
Similarly, Morgan Stanley upgraded their price target from $28 to $30 per share and awarded an “overweight” rating on April 20th in recognition of CenterPoint Energy’s efforts to align with environmentally friendly policies while also increasing production levels without sacrificing quality or efficiency.
Royal Bank of Canada also reaffirmed its “outperform” rating and issued a $33 target price on shares of CenterPoint Energy by noting that they haven’t seen any negative reports– as per industry practices– which signals the company is essentially fundamentally sound.
Notably, Bank of America upped their target price on CenterPoint Energy from $30 to $35 per share and gave the company a “buy” rating in a research note on April 14th to give an even broader endorsement.
Despite all these developments, CenterPoint Energy’s dividend payout ratio is presently 60.32%, which means that investors can look forward to dividends – with those of record on Thursday, May 18th, set to receive about $0.19 per share at the next payment date on Thursday, June 8th. This represents a $0.76 dividend per annum and a dividend yield of 2.66%.
In conclusion, while Dimensional Fund Advisors LP may have sold off some shares of CenterPoint Energy stock during the last quarter of last year based on records reported this week, it remains evident that many other players in the investment community view CenterPoint Energy as an appealing company with significant growth potential in both the short and long-term.
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Institutional Investors and Directors Adjust Stakes in CenterPoint Energy, Company Announces Quarterly Dividend
On May 25, 2023, CenterPoint Energy (NYSE: CNP) announced that institutional investors and hedge funds have significantly added or reduced their stakes in the company. For instance, Central Trust Co boosted its stake by 137.5% during the third quarter, now owning 950 shares of the utilities provider’s stock worth $27,000 after acquiring an additional 550 shares in the last quarter. Covestor Ltd also increased its stake in shares of CenterPoint Energy by 176.7% during the first quarter, and finally Affiance Financial LLC and MinichMacGregor Wealth Management LLC both purchased new stakes in shares worth approximately $31,000 and $33,000 respectively. Boyd Watterson Asset Management LLC OH purchased a new stake worth approximately $34,000 in CenterPoint Energy during the same period. Institutional investors and hedge funds own as much as 90.28% of the company’s stock.
However, some directors have recently sold their shares in CenterPoint Energy too. On May 8th, Director Barry T. Smitherman sold 5,000 shares at an average price of $30.51 for a total transaction of $152,550; following completion of the sale his new holding is valued at approximately $642,998.25 with over 21k shares now owned directly by him in this Houston-based energy delivery business specializing in electric transmission and natural gas distribution services within competitive markets across various states.This is not uncommon management practice; Directors Ted Pound on May 5th also sold as much as 2,770 shares of company’s stock at an average price of $30.50 for a total transaction value of $84,485.
The recent announcement regarding quarterly dividends from CenterPoint Energy should come as good news to shareholders after a long wait since May18th-May8th when they are likely to receive their payments from this highly capitalized company that had declared $0.19 per share on the day of Record; which, if paid as per schedule on June 8th, will represent a dividend yield of approximately 2.66%. This translates into an annualized dividend payout ratio of 0.76%.
CenterPoint Energy’s stock price opened at $28.62 on Thursday and has had a mixed year with both highs and lows such as a fifty-two-week low of $25.03 and a fifty-two-week high of $33.50, respectively during this time. The company also reported its first quarter’s earnings results wherein it managed to beat market consensus estimates for first-quarter earnings by posting $0.50 EPS compared to analysts’ estimate of $0.48 EPS; however, revenues appeared slightly lower than projected at the same period last year.
Despite challenges facing energy producers worldwide in recent years due to climate change concerns and volatility in global oil supply-demand dynamics etc., Houston-based CenterPoint Energy remains committed to providing reliable energy solutions to both residential consumers and businesses across competitive markets within the United States while keeping pace with shifts from traditional fuel sources towards cleaner alternatives whenever possible.
In conclusion, investor sentiment vis-à-vis this utilities provider remains upbeat even during stormy weather conditions caused by forces beyond immediate control including but not limited ecological pressures arising from environmental regulations/renewable energy timelines/labor-related issues particularly given attractive yields provided through dividends announced periodically that have come hand-in-hand with strong returns seen so far.
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