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CenterPoint Energy (NYSE:CNP) Interest Coverage

: 1.60 (As of Dec. 2023)
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Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. CenterPoint Energy's Operating Income for the three months ended in Dec. 2023 was $321 Mil. CenterPoint Energy's Interest Expense for the three months ended in Dec. 2023 was $-201 Mil. CenterPoint Energy's interest coverage for the quarter that ended in Dec. 2023 was 1.60. The higher the ratio, the stronger the company's financial strength is.

Warning Sign:

Ben Graham prefers companies' interest coverage to be at least 5. CenterPoint Energy Inc interest coverage is 2.51, which is low.

The historical rank and industry rank for CenterPoint Energy's Interest Coverage or its related term are showing as below:

CNP' s Interest Coverage Range Over the Past 10 Years
Min: 1.89   Med: 2.35   Max: 2.99
Current: 2.51


CNP's Interest Coverage is ranked worse than
67.81% of 438 companies
in the Utilities - Regulated industry
Industry Median: 3.605 vs CNP: 2.51

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.


CenterPoint Energy Interest Coverage Historical Data

The historical data trend for CenterPoint Energy's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

* Premium members only.

CenterPoint Energy Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Interest Coverage
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.89 2.31 2.58 2.99 2.51

CenterPoint Energy Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
Interest Coverage Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.57 3.61 2.28 2.83 1.60

Competitive Comparison

For the Utilities - Regulated Electric subindustry, CenterPoint Energy's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


CenterPoint Energy Interest Coverage Distribution

For the Utilities - Regulated industry and Utilities sector, CenterPoint Energy's Interest Coverage distribution charts can be found below:

* The bar in red indicates where CenterPoint Energy's Interest Coverage falls into.



CenterPoint Energy Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage=-1* Operating Income /Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt (1).


Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

CenterPoint Energy's Interest Coverage for the fiscal year that ended in Dec. 2023 is calculated as

Here, for the fiscal year that ended in Dec. 2023, CenterPoint Energy's Interest Expense was $-701 Mil. Its Operating Income was $1,760 Mil. And its Long-Term Debt & Capital Lease Obligation was $17,559 Mil.

Interest Coverage=-1* Operating Income (A: Dec. 2023 )/Interest Expense (A: Dec. 2023 )
=-1*1760/-701
=2.51

CenterPoint Energy's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the three months ended in Dec. 2023, CenterPoint Energy's Interest Expense was $-201 Mil. Its Operating Income was $321 Mil. And its Long-Term Debt & Capital Lease Obligation was $17,559 Mil.

Interest Coverage=-1* Operating Income (Q: Dec. 2023 )/Interest Expense (Q: Dec. 2023 )
=-1*321/-201
=1.60

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

The higher the ratio, the stronger the company's Financial Strength is.


CenterPoint Energy  (NYSE:CNP) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .


CenterPoint Energy Interest Coverage Related Terms

Thank you for viewing the detailed overview of CenterPoint Energy's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.


CenterPoint Energy (NYSE:CNP) Business Description

Traded in Other Exchanges
Address
1111 Louisiana, Houston, TX, USA, 77002
CenterPoint Energy owns a portfolio of businesses. Its regulated electric utilities provide transmission and distribution services to more than 2.5 million customers in the Houston area, southern Indiana, and west central Ohio. The company has natural gas distribution systems in six states serving approximately 4 million customers.
Executives
Christopher A Foster officer: EVP and CFO 77 BEALE ST., P.O. BOX 770000, SAN FRANCISCO CA 94177
David J Lesar director, officer: President & CEO
Jason P. Wells officer: EVP & CFO 77 BEALE ST., P.O. BOX 770000, SAN FRANCISCO CA 94177
Kristie Colvin officer: SVP and CAO 1111 LOUISIANA, HOUSTON TX 77002
Ricky Anthony Raven director 1111 LOUISIANA STREEET, STE. 4600, HOUSTON TX 77002
Thaddeus J. Malik director 1111 LOUISIANA STREET, STE. 4600, HOUSTON TX 77002
Russell Keith Wright officer: VP, FP&A and Interim CAO 1111 LOUISIANA STREET, STE 4600, HOUSTON TX 77002
Barry T Smitherman director NRG ENERGY, INC., 804 CARNEGIE CENTER, PRINCETON NJ 08540
Ted Pound director C/O ALLIS-CHALMERS, 5075 WESTHIEMER, #890, HOUSTON TX 77056
Kara Gostenhofer Ryan officer: Vice President and CAO 1111 LOUISIANA STREET, # 4600, HOUSTON TX 77002
Martin H. Nesbitt director 10319 WESTLAKE DRIVE, SUITE 112, BETHESDA MD 20817
Wendolynn Montoya Cloonan director 1111 LOUISIANA STREET #4600, HOUSTON TX 77002
Wooten Lewis Raquelle director 1111 LOUISIANA STREET, #4600, HOUSTON TX 77002
Phillip R Smith director 1111 LOUISIANA, HOUSTON TX 77002
Earl M Cummings director 1111 LOUISIANA STREET #4600, HOUSTON TX 77002