CenterPoint Energy vs Xcel Energy Which Is More Profitable?

CenterPoint Energy and Xcel Energy are two major players in the energy sector, both publicly traded companies that provide electricity and natural gas to millions of customers across the United States. CenterPoint Energy operates mainly in the southern United States, while Xcel Energy serves customers in the Midwest and western states. Investors looking to add energy stocks to their portfolio may want to compare the performance and financials of these two companies to determine which may be a better investment opportunity.

CenterPoint Energy or Xcel Energy?

When comparing CenterPoint Energy and Xcel Energy, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between CenterPoint Energy and Xcel Energy.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. CenterPoint Energy has a dividend yield of 2.54%, while Xcel Energy has a dividend yield of 2.37%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. CenterPoint Energy reports a 5-year dividend growth of -7.05% year and a payout ratio of 53.06%. On the other hand, Xcel Energy reports a 5-year dividend growth of 6.47% year and a payout ratio of 61.08%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with CenterPoint Energy P/E ratio at 21.49 and Xcel Energy's P/E ratio at 20.43. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. CenterPoint Energy P/B ratio is 1.96 while Xcel Energy's P/B ratio is 1.99.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, CenterPoint Energy has seen a 5-year revenue growth of -0.42%, while Xcel Energy's is 0.14%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with CenterPoint Energy's ROE at 9.50% and Xcel Energy's ROE at 10.34%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $31.86 for CenterPoint Energy and $67.90 for Xcel Energy. Over the past year, CenterPoint Energy's prices ranged from $25.41 to $33.00, with a yearly change of 29.87%. Xcel Energy's prices fluctuated between $46.79 and $73.38, with a yearly change of 56.83%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.