CenterPoint Energy Inc Stock Downgraded (CNP)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- CenterPoint Energy (NYSE: CNP) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and poor profit margins.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 32.5%. Since the same quarter one year prior, revenues slightly increased by 2.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has remained constant at $481.00 million with no significant change when compared to the same quarter last year. Even though CENTERPOINT ENERGY INC's cash flow growth was minimal, the firm managed to surpass its industry's average growth rate of -57.17%.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Multi-Utilities industry. The net income has decreased by 15.7% when compared to the same quarter one year ago, dropping from $134.00 million to $113.00 million.
  • Currently the debt-to-equity ratio of 1.93 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated.

CenterPoint Energy, Inc. operates as a public utility holding company in the United States. CenterPoint Energy has a market cap of $10.1 billion and is part of the utilities sector and utilities industry. Shares are up 1.6% year to date as of the close of trading on Friday.

You can view the full CenterPoint Energy Ratings Report or get investment ideas from our investment research center.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

If you liked this article you might like

Best Companies to Work for in 2017? Here's the Top 10

These Stocks Show Change of Direction

Analysts' Actions -- American Express, Discovery, E-Trade, Xerox and More

CenterPoint Energy Is Breaking Out on the Upside

Credit Suisse Downgrades CenterPoint on Strategic Review Woes