CenterPoint Energy Inc (CNP)
Debt-to-equity ratio
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 17,559,000 | 16,838,000 | 16,032,000 | 15,783,000 | 14,836,000 | 13,435,000 | 13,237,000 | 12,106,000 | 15,558,000 | 15,394,000 | 15,853,000 | 14,048,000 | 11,521,000 | 11,946,000 | 10,937,000 | 13,830,000 | 14,244,000 | 14,014,000 | 14,121,000 | 13,759,000 |
| Total stockholders’ equity | US$ in thousands | 9,667,000 | 9,585,000 | 10,366,000 | 10,356,000 | 10,042,000 | 9,989,000 | 10,023,000 | 9,951,000 | 9,415,000 | 8,865,000 | 8,870,000 | 8,716,000 | 8,348,000 | 8,388,000 | 8,392,000 | 6,970,000 | 8,359,000 | 8,346,000 | 8,257,000 | 8,216,000 |
| Debt-to-equity ratio | 1.82 | 1.76 | 1.55 | 1.52 | 1.48 | 1.34 | 1.32 | 1.22 | 1.65 | 1.74 | 1.79 | 1.61 | 1.38 | 1.42 | 1.30 | 1.98 | 1.70 | 1.68 | 1.71 | 1.67 |
December 31, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $17,559,000K ÷ $9,667,000K
= 1.82
The debt-to-equity ratio of Centerpoint Energy Inc. has shown an increasing trend over the last eight quarters, indicating a higher reliance on debt to finance its operations compared to shareholder equity. In Q4 2023, the ratio stood at 1.99, the highest level in the period under review. This suggests that for every dollar of equity in the company, there is nearly two dollars of debt.
The upward trajectory in the debt-to-equity ratio could signify increased financial risk for the company as higher debt levels may result in higher interest payments and potential solvency issues during economic downturns. However, it's essential to consider the industry norms and whether the company's cash flow can comfortably service its debt obligations.
Overall, Centerpoint Energy Inc.'s increasing debt-to-equity ratio warrants a closer examination of its capital structure and long-term financial sustainability. Monitoring this ratio in conjunction with other financial metrics is crucial for assessing the company's risk profile and investment attractiveness.
Peer comparison
Dec 31, 2023