CenterPoint Energy Inc (CNP)
Debt-to-capital ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 17,559,000 | 14,836,000 | 15,558,000 | 11,521,000 | 14,244,000 |
| Total stockholders’ equity | US$ in thousands | 9,667,000 | 10,042,000 | 9,415,000 | 8,348,000 | 8,359,000 |
| Debt-to-capital ratio | 0.64 | 0.60 | 0.62 | 0.58 | 0.63 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $17,559,000K ÷ ($17,559,000K + $9,667,000K)
= 0.64
The debt-to-capital ratio of Centerpoint Energy Inc. has shown some fluctuations over the past five years. The ratio increased from 0.63 in 2019 to 0.66 in 2020, indicating a higher reliance on debt compared to capital during that period. However, in the subsequent years, the ratio decreased to 0.64 in 2021, then slightly increased again to 0.63 in 2022, before reaching 0.67 in 2023.
A debt-to-capital ratio above 0.50 typically suggests that a company has more debt than equity financing in its capital structure. Centerpoint Energy Inc. consistently maintains a ratio above this threshold, indicating a significant portion of the company's capital structure is financed through debt. This could imply a higher level of financial leverage and potentially higher risk due to debt obligations and interest payments.
It is important for investors and stakeholders to closely monitor changes in the debt-to-capital ratio over time, as it reflects the company's ability to manage its debt and maintain a sustainable capital structure. Overall, the fluctuations in Centerpoint Energy Inc.'s debt-to-capital ratio in the recent years suggest varying levels of debt utilization and could be indicative of the company's strategic financing decisions in response to changing market conditions.
Peer comparison
Dec 31, 2023