CenterPoint Energy Return On Equity vs. Profit Margin
| HOU Stock | EUR 30.80 0.60 1.99% |
For CenterPoint Energy profitability analysis, we use financial ratios and fundamental drivers that measure the ability of CenterPoint Energy to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well CenterPoint Energy utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between CenterPoint Energy's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of CenterPoint Energy over time as well as its relative position and ranking within its peers.
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CenterPoint Energy Profit Margin vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining CenterPoint Energy's current stock value. Our valuation model uses many indicators to compare CenterPoint Energy value to that of its competitors to determine the firm's financial worth. CenterPoint Energy is rated # 5 in return on equity category among its peers. It is rated # 4 in profit margin category among its peers fabricating about 1.04 of Profit Margin per Return On Equity. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the CenterPoint Energy's earnings, one of the primary drivers of an investment's value.CenterPoint Profit Margin vs. Return On Equity
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
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| = | 0.11 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Profit Margin measures overall efficiency of a company and shows its ability to withstand competition as well as defend against adverse conditions such as rising costs, falling prices, decline in sales or management distress. Profit margin tells investors how well the company executes on its overall pricing strategies as well as how effective the company in controlling its costs.
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| = | 0.11 % |
In a nutshell, Profit Margin indicator shows the amount of money the company makes from total sales or revenue. It can provide a good insight into companies in the same sector, as well as help to identify trends of a company from year to year.
CenterPoint Profit Margin Comparison
CenterPoint Energy is rated # 3 in profit margin category among its peers.
CenterPoint Energy Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in CenterPoint Energy, profitability is also one of the essential criteria for including it into their portfolios because, without profit, CenterPoint Energy will eventually generate negative long term returns. The profitability progress is the general direction of CenterPoint Energy's change in net profit over the period of time. It can combine multiple indicators of CenterPoint Energy, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
CenterPoint Energy, Inc. operates as a public utility holding company in the United States. The company was founded in 1882 and is headquartered in Houston, Texas. CENTERPOINT ENERGY operates under Utilities - Regulated Gas classification in Germany and is traded on Frankfurt Stock Exchange. It employs 7977 people.
CenterPoint Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on CenterPoint Energy. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of CenterPoint Energy position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the CenterPoint Energy's important profitability drivers and their relationship over time.
Use CenterPoint Energy in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if CenterPoint Energy position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CenterPoint Energy will appreciate offsetting losses from the drop in the long position's value.CenterPoint Energy Pair Trading
CenterPoint Energy Pair Trading Analysis
The ability to find closely correlated positions to CenterPoint Energy could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace CenterPoint Energy when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back CenterPoint Energy - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling CenterPoint Energy to buy it.
The correlation of CenterPoint Energy is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as CenterPoint Energy moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if CenterPoint Energy moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for CenterPoint Energy can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your CenterPoint Energy position
In addition to having CenterPoint Energy in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
Run Currency Funds Thematic Idea Now
Currency Funds
Funds or Etfs investing in a single currency or combination of currencies from different countries in order to replicate respective foreign exchange markets. The Currency Funds theme has 43 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Currency Funds Theme or any other thematic opportunities.
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Additional Information and Resources on Investing in CenterPoint Stock
When determining whether CenterPoint Energy is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if CenterPoint Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about Centerpoint Energy Stock. Highlighted below are key reports to facilitate an investment decision about Centerpoint Energy Stock:Check out Risk vs Return Analysis. For more detail on how to invest in CenterPoint Stock please use our How to Invest in CenterPoint Energy guide.You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
To fully project CenterPoint Energy's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of CenterPoint Energy at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include CenterPoint Energy's income statement, its balance sheet, and the statement of cash flows.