CenterPoint Energy Hiked Its Quarterly Dividend 3.7% (CNP)
By: Ned Piplovic,
CenterPoint Energy, Inc. (NYSE:CNP) enhanced its quarterly dividend by 3.7% for its next distribution to shareholders and offers a 4% dividend yield.
The current dividend payout hike continues CenterPoint Energy’s current streak of raising its annual dividend consecutively for more than a decade. In addition to the steady and reliable dividend income distribution, the company rewarded its shareholders with a 9%-plus asset appreciation for a double-digit-percentage total return over the past 12 months.
The company’s next ex-dividend date is set for February 14, 2018, and the pay date follows just a little more than three weeks later, on March 8, 2018.
CenterPoint Energy Incorporated (NYSE:CNP)
Founded in 1882 and based in Houston, Texas, CenterPoint Energy, Inc. is a domestic energy delivery company that includes electric transmission & distribution, natural gas distribution and energy services operations. As of the end of 2017, the company served more than five million metered customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma and Texas. The company owned more than 30,000 miles of overhead distribution and transmission lines, 24,000 miles of underground distribution and transmission lines, as well as more than 230 substations. With OGE Energy Corporation, the company also owns a 54.1% limited partner interest in the Enable Midstream Partners master limited partnership (MLP). The MLP operates and develops natural gas and crude oil infrastructure assets.
The company’s current $0.2775 dividend payout for the first quarter of 2018 is 3.7% higher than the $0.2675 payout from the last quarter of 2017. This current $0.2775 amount is equivalent to a $1.11 annualized dividend distribution and converts to a 4% dividend yield.
CenterPoint Energy’s current dividend yield is 11.5% above the 3.57% average yield of all the companies in the Diversified Utilities segment. Additionally, the company’s 4% dividend yield outperforms the 2.39% yield of the overall Utilities sector by more than 66%.
The company has been distributing dividends to its shareholders since 1922. Over the past two decades, the company managed to avoid any cuts to its annual dividend and has boosted its annual distribution 90% of the time. Since 2002, the company failed to raise its annual dividend only twice, in 2004 and in 2005, when the company distributed the same $0.40 annual payout in these two years as it did in 2003. Since 2006, the company has hiked its annual dividend amount every year at an average growth rate of 8.2% per year. Over the past 13 consecutive years, the total annual payout has nearly tripled.
The company’s share price rose gradually for the first two-thirds of its current trailing 12-month period. While the share price gave back some of its gains recently, it still ended the year with a gain. Beginning from its 52-week low of $25.44 on January 19, 2017, the share price grew more than 23% and reached its 52-week high of $31.45 by September 11, 2017.
However, the share price did not sustain that level for long and it lost more than 9% of its value by the end of September 2017. The share price fluctuated between $29 and $30 for the following two months and then started declining at the beginning of December 2017. By mid-January 2018, the share price fell below $28 and closed on January 17, 2018, at 27.88. While the January 17, 2018, closing price of $27.88 was 11.4% below the 52-week high from September 2017, it was 9.6% higher then the 52-week low from one year earlier and approximately 37 higher than it was five years ago.
While the share price gains and the yield might not be as high as in some other sectors, the company’s shareholders still receive reliable double-digit-percentage total returns. Combined with the 9.6% share price growth over the past 12 months, the $1.07 total annual dividend for 2017 rewarded shareholders with a 13.6% total return. The shareholder return on investment was more than 34% for the last three years and 64% over the most recent five-year period.
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