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Yahoo
3 hours ago
- Business
- Yahoo
Why CenterPoint Energy (CNP) is a Great Dividend Stock Right Now
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments. Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns. Based in Houston, CenterPoint Energy (CNP) is in the Utilities sector, and so far this year, shares have seen a price change of 16.96%. The energy delivery company is paying out a dividend of $0.22 per share at the moment, with a dividend yield of 2.37% compared to the Utility - Electric Power industry's yield of 3.27% and the S&P 500's yield of 1.56%. Taking a look at the company's dividend growth, its current annualized dividend of $0.88 is up 8.6% from last year. CenterPoint Energy has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 8.25%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, CenterPoint's payout ratio is 55%, which means it paid out 55% of its trailing 12-month EPS as dividend. Looking at this fiscal year, CNP expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $1.75 per share, representing a year-over-year earnings growth rate of 8.02%. Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer a quarterly payout. High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, CNP presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy). Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CenterPoint Energy, Inc. (CNP) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 hours ago
- Business
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Estimating The Fair Value Of Endeavour Mining plc (TSE:EDV)
Endeavour Mining's estimated fair value is CA$40.34 based on 2 Stage Free Cash Flow to Equity With CA$42.07 share price, Endeavour Mining appears to be trading close to its estimated fair value Our fair value estimate is 15% lower than Endeavour Mining's analyst price target of US$47.51 Today we will run through one way of estimating the intrinsic value of Endeavour Mining plc (TSE:EDV) by taking the forecast future cash flows of the company and discounting them back to today's value. We will take advantage of the Discounted Cash Flow (DCF) model for this purpose. Believe it or not, it's not too difficult to follow, as you'll see from our example! We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF ($, Millions) US$1.06b US$1.13b US$775.4m US$473.1m US$395.1m US$352.4m US$328.4m US$315.2m US$308.7m US$306.5m Growth Rate Estimate Source Analyst x10 Analyst x11 Analyst x7 Analyst x1 Est @ -16.49% Est @ -10.80% Est @ -6.81% Est @ -4.02% Est @ -2.07% Est @ -0.70% Present Value ($, Millions) Discounted @ 7.6% US$985 US$980 US$623 US$353 US$274 US$227 US$197 US$176 US$160 US$148 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$4.1b After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.5%. We discount the terminal cash flows to today's value at a cost of equity of 7.6%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$307m× (1 + 2.5%) ÷ (7.6%– 2.5%) = US$6.2b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$6.2b÷ ( 1 + 7.6%)10= US$3.0b The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is US$7.1b. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of CA$42.1, the company appears around fair value at the time of writing. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Endeavour Mining as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.6%, which is based on a levered beta of 0.992. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. View our latest analysis for Endeavour Mining Strength Debt is not viewed as a risk. Weakness Dividend is low compared to the top 25% of dividend payers in the Metals and Mining market. Opportunity Expected to breakeven next year. Has sufficient cash runway for more than 3 years based on current free cash flows. Good value based on P/S ratio compared to estimated Fair P/S ratio. Threat Paying a dividend but company is unprofitable. Although the valuation of a company is important, it ideally won't be the sole piece of analysis you scrutinize for a company. The DCF model is not a perfect stock valuation tool. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. For Endeavour Mining, we've compiled three essential items you should consider: Risks: To that end, you should be aware of the 2 warning signs we've spotted with Endeavour Mining . Management:Have insiders been ramping up their shares to take advantage of the market's sentiment for EDV's future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. Simply Wall St updates its DCF calculation for every Canadian stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
13 hours ago
- Business
- Yahoo
POSaBIT Systems Corp (POSAF) Q1 2025 Earnings Call Highlights: Record Margins and Strong Growth ...
Adjusted Gross Margin Percentage: Increased from 64% in Q4 2024 to 65% in Q1 2025, an all-time high for POSaBIT. Adjusted Gross Profit: Grew by 9.4% year-over-year from Q1 2024 to Q1 2025. Adjusted EBITDA: Increased by 93.5% year-over-year from Q1 2024 to Q1 2025. New Locations Onboarded: Over 50 new locations in Q1 2025. Cash Flow: Positive cash flow in Q1 2025 despite a slight reduction in available cash due to final legal liability payment and salary increases. Warning! GuruFocus has detected 5 Warning Signs with POSAF. Release Date: May 30, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. POSaBIT Systems Corp (POSAF) onboarded over 50 new locations in Q1, indicating strong growth in their point-of-sale business. The company's new e-commerce platform has exceeded forecasts and is growing rapidly since its beta launch. Adjusted gross margin percentage increased to an all-time high of 65% in Q1, up from 64% in Q4 of the previous year. Year-over-year, adjusted gross profit grew by 9.4% and adjusted EBITDA grew by 93.5%, showcasing significant financial improvement. POSaBIT Systems Corp (POSAF) was cash flow positive in Q1 and expects future quarters to continue this trend. Top line revenue was down slightly quarter-over-quarter due to migration between payment processors. Available cash decreased slightly in Q1 due to a final payment on a legal liability and salary increases. The company did not provide formal guidance for future quarters, which may create uncertainty for investors. The earnings call was brief, potentially leaving some stakeholders with unanswered questions. The timing of the earnings call at 4:30 PM Eastern Time on a Friday may have been inconvenient for some participants. Q: Can you provide an overview of POSaBIT's performance in Q1 2025? A: Ryan Hamlin, CEO, stated that Q1 2025 was consistent with the previous four quarters, with adjusted gross margin dollars and percentage remaining stable. The company focused on resource efficiency and maximizing gross profit, even when revenue was slightly down. They onboarded over 50 new locations and saw significant growth in their e-commerce platform. Q: What were the key financial highlights for Q1 2025? A: Ryan Hamlin noted that top-line revenue was slightly down due to a migration between payment processors aimed at improving gross margin and reducing risk. Adjusted gross margin percentage increased to 65%, an all-time high for POSaBIT. Year-over-year, adjusted gross profit grew by 9.4%, and adjusted EBITDA increased by 93.5%. Q: How did cash flow and financial stability fare in Q1 2025? A: The company experienced a slight reduction in available cash due to a final legal liability payment, small salary increases, and paying down aged payables. However, POSaBIT was cash flow positive for the quarter and expects future quarters to continue this trend. Q: What are the expectations for Q2 2025? A: Ryan Hamlin expressed optimism for Q2, anticipating improvements in adjusted gross margin dollars and adjusted EBITDA. While no formal guidance was provided, the company remains positive about its future prospects. Q: Were there any questions from participants during the call? A: There were no questions from participants during the call, and the session concluded without further inquiries. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
18 hours ago
- Business
- Yahoo
Estimating The Fair Value Of CWG Holdings Berhad (KLSE:CWG)
CWG Holdings Berhad's estimated fair value is RM0.17 based on 2 Stage Free Cash Flow to Equity With RM0.17 share price, CWG Holdings Berhad appears to be trading close to its estimated fair value Industry average of 209% suggests CWG Holdings Berhad's peers are currently trading at a higher premium to fair value In this article we are going to estimate the intrinsic value of CWG Holdings Berhad (KLSE:CWG) by estimating the company's future cash flows and discounting them to their present value. The Discounted Cash Flow (DCF) model is the tool we will apply to do this. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine. Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To start off with, we need to estimate the next ten years of cash flows. Seeing as no analyst estimates of free cash flow are available to us, we have extrapolate the previous free cash flow (FCF) from the company's last reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today's value: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (MYR, Millions) RM4.16m RM3.66m RM3.39m RM3.25m RM3.19m RM3.19m RM3.22m RM3.27m RM3.35m RM3.44m Growth Rate Estimate Source Est @ -18.92% Est @ -12.15% Est @ -7.41% Est @ -4.10% Est @ -1.78% Est @ -0.15% Est @ 0.99% Est @ 1.78% Est @ 2.34% Est @ 2.73% Present Value (MYR, Millions) Discounted @ 9.8% RM3.8 RM3.0 RM2.6 RM2.2 RM2.0 RM1.8 RM1.7 RM1.5 RM1.4 RM1.4 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = RM21m The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (3.6%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 9.8%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = RM3.4m× (1 + 3.6%) ÷ (9.8%– 3.6%) = RM58m Present Value of Terminal Value (PVTV)= TV / (1 + r)10= RM58m÷ ( 1 + 9.8%)10= RM23m The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is RM44m. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Compared to the current share price of RM0.2, the company appears around fair value at the time of writing. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at CWG Holdings Berhad as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 9.8%, which is based on a levered beta of 1.041. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Check out our latest analysis for CWG Holdings Berhad Whilst important, the DCF calculation ideally won't be the sole piece of analysis you scrutinize for a company. The DCF model is not a perfect stock valuation tool. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For CWG Holdings Berhad, there are three important elements you should further examine: Risks: For example, we've discovered 4 warning signs for CWG Holdings Berhad (2 are a bit concerning!) that you should be aware of before investing here. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! Other Top Analyst Picks: Interested to see what the analysts are thinking? Take a look at our interactive list of analysts' top stock picks to find out what they feel might have an attractive future outlook! PS. Simply Wall St updates its DCF calculation for every Malaysian stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
a day ago
- Business
- Yahoo
2 Cash-Producing Stocks with Promising Prospects and 1 to Be Wary Of
While strong cash flow is a key indicator of stability, it doesn't always translate to superior returns. Some cash-heavy businesses struggle with inefficient spending, slowing demand, or weak competitive positioning. Cash flow is valuable, but it's not everything - StockStory helps you identify the companies that truly put it to work. That said, here are two cash-producing companies that reinvest wisely to drive long-term success and one that may face some trouble. Trailing 12-Month Free Cash Flow Margin: 5.1% Boasting partnerships with media franchises like Marvel and One Piece, Funko (NASDAQ:FNKO) is a company specializing in creating and distributing licensed pop culture collectibles. Why Should You Dump FNKO? Products and services have few die-hard fans as sales have declined by 10% annually over the last two years Earnings per share fell by 15% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable Waning returns on capital from an already weak starting point displays the inefficacy of management's past and current investment decisions Funko is trading at $4.25 per share, or 20.2x forward P/E. If you're considering FNKO for your portfolio, see our FREE research report to learn more. Trailing 12-Month Free Cash Flow Margin: 6% A construction engineering services company, Quanta (NYSE:PWR) provides infrastructure solutions to a variety of sectors, including energy and communications. Why Should You Buy PWR? Backlog has averaged 23.1% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future Forecasted revenue growth of 10.3% for the next 12 months indicates its momentum over the last two years is sustainable Earnings per share grew by 22.4% annually over the last two years and trumped its peers Quanta's stock price of $337.67 implies a valuation ratio of 32x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it's free. Trailing 12-Month Free Cash Flow Margin: 20.2% Started as a two-man shop dating back to the 1860s, Armstrong (NYSE:AWI) provides ceiling and wall products to commercial and residential spaces. Why Does AWI Stand Out? Solid 9.2% annual revenue growth over the last two years indicates its offering's solve complex business issues Highly efficient business model is illustrated by its impressive 24.6% operating margin Strong free cash flow margin of 19.6% enables it to reinvest or return capital consistently At $155.98 per share, Armstrong World trades at 21.8x forward P/E. Is now a good time to buy? Find out in our full research report, it's free. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
