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CenterPoint Energy (NYSE:CNP) Financial Strength

: 3 (As of Dec. 2023)
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CenterPoint Energy has the Financial Strength Rank of 3. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.

Warning Sign:

CenterPoint Energy Inc displays poor financial strength. Usually, this is caused by too much debt for the company.

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.

CenterPoint Energy's Interest Coverage for the quarter that ended in Dec. 2023 was 1.60. CenterPoint Energy's debt to revenue ratio for the quarter that ended in Dec. 2023 was 2.13. As of today, CenterPoint Energy's Altman Z-Score is 0.73.


Competitive Comparison

For the Utilities - Regulated Electric subindustry, CenterPoint Energy's Financial Strength, along with its competitors' market caps and Financial Strength 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 Financial Strength Distribution

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

* The bar in red indicates where CenterPoint Energy's Financial Strength falls into.



CenterPoint Energy Financial Strength Calculation

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.

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

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:

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

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

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

2. Debt to revenue ratio. The lower, the better.

CenterPoint Energy's Debt to Revenue Ratio for the quarter that ended in Dec. 2023 is

Debt to Revenue Ratio=Total Debt (Q: Dec. 2023 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(1059 + 17559) / 8728
=2.13

3. Altman Z-Score.

Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.

CenterPoint Energy has a Z-score of 0.73, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.

Warning Sign:

Altman Z-score of 0.73 is in distress zone. This implies bankruptcy possibility in the next two years.

* 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.


CenterPoint Energy  (NYSE:CNP) Financial Strength Explanation

The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.

CenterPoint Energy has the Financial Strength Rank of 3. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.


CenterPoint Energy Financial Strength Related Terms

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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