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CenterPoint Energy Inc CNP

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CenterPoint Announces Sale of Gas LDCs in Arkansas and Oklahoma at Attractive Price

Charles Fishman, CFA Equity Analyst

Analyst Note

| Charles Fishman, CFA |

We are reaffirming our $25 fair value estimate for CenterPoint Energy after the company announced it has agreed to sell its Arkansas and Oklahoma local natural gas distribution companies, or LDCs, to Summit Utilities, which is majority-owned by JPMorgan Chase, for $2.15 billion in cash. The total consideration includes approximately $425 million for unrecovered storm-related incremental natural gas costs incurred in February.

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Company Profile

Business Description

CenterPoint Energy owns a portfolio of energy-related businesses. Its regulated electric utility provides 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 eight states serving approximately 4.5 million customers. CenterPoint owns approximately 54% of Enable Midstream Partners, a partnership consisting of natural gas processing and storage facilities and more than 21,000 miles of interstate, intrastate, and gathering pipelines in the midcontinent region. Enable has announced plans to merge with Energy Transfer LP. We expect this will lead to CenterPoint divesting its midstream investment, becoming a fully regulated utility.

1111 Louisiana
Houston, TX, 77002
T +1 713 207-1111
Sector Utilities
Industry Utilities - Regulated Electric
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type Slow Growth
Employees 15,565