Why CenterPoint Energy (CNP) is a Great Dividend Stock Right Now

All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.CenterPoint Energy in FocusBased in Houston, CenterPoint Energy (CNP) is in the Utilities sector, and so far this year, shares have seen a price change of 16.96%. The energy delivery company is paying out a dividend of $0.22 per share at the moment, with a dividend yield of 2.37% compared to the Utility - Electric Power industry's yield of 3.27% and the S&P 500's yield of 1.56%.Taking a look at the company's dividend growth, its current annualized dividend of $0.88 is up 8.6% from last year. CenterPoint Energy has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 8.25%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, CenterPoint's payout ratio is 55%, which means it paid out 55% of its trailing 12-month EPS as dividend.Looking at this fiscal year, CNP expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $1.75 per share, representing a year-over-year earnings growth rate of 8.02%.Bottom LineInvestors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer a quarterly payout.High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, CNP presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CenterPoint Energy, Inc. (CNP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks