Centrica Share Discussion Threads

[gbb483] 26/1/2014 10:55

Can you edit that bit near the top of your last post - its completely screwing up the formatting of the page.

[mitchy] 26/1/2014 10:36

Why Centrica PLC Should Be A Winner This Year

By Alan Oscroft - Monday, 20 January, 2014 | See also: CNACPYYY

0inShareWhat does 2014 have in store for the utility companies as we pull further from recession? They've been in a bit of a mini-slump of late, with Centrica (LSE: CNA) (NASDAQOTH: CPYYY.US) amongst the hardest hit, so that's where my attention is turned today.Here's a quick look at Centrica's past five years' earnings and dividend figures, with forecasts for 2013 and the next two years:


Dec EPS Change P/E Dividend Change Yield Cover
2008 21.7p -20% 12.3 12.6p 4.7% 1.7x
2019 21.7p 0% 13.0 12.8p +1.6% 4.6% 1.7x
2010 25.2p +16% 13.2 14.3p +11% 4.3% 1.8x
2011 25.6p +2% 11.3 15.4p +7.7% 5.3% 1.7x
2012 27.1p +6% 12.3 16.4p +6.5% 4.9% 1.7x
2013* 26.7p -2% 12.1 17.2p +4.9% 5.4% 1.6x
2014* 27.1p +2% 11.9 17.9p +4.1% 5.6% 1.5x
2015* 28.8p +7% 11.1 18.8p +5.0% 5.8% 1.5x



The share price

Now, that table looks like a company in good health - and I think it is. And although dividend cover has fallen a little, it's still pretty healthy for the utilities sector.But since Labour's plans to cap energy prices were mooted last September, the Centrica share price has slumped by 20% to today's 320p level. And it's now in negative territory over the past 12 months, having dipped by more than 5% while the FTSE 100 has gained around 11%.

There are problems

There are genuine problems facing Centrica and the rest of the sector.Firstly, although energy prices have been rising, actually consumption is heading in the opposite direction as more and more people and businesses focus on saving the stuff. And with political will turning in favour of consumers, it seems unlikely we'll see the same retail price rises in the next few years as we've seen over the past few.There's perhaps another problem looming as a direct result of our economic recovery too. Centrica, like its peers, carries large amounts of debt, and during these low interest times the relatively low cost of servicing it has left Centrica able to pay out big dividends. As economies strengthen, interest rates will inevitably rise (it's a question of when, not if), and Centrica's debt may not look so cheap then.

But they're exaggerated

But despite those genuine worries, I think Centrica is still looking good - those forecasts above were all made after the parties had engaged in their pre-election posturing, and with the knowledge of our brightening economic outlook. The problems are already in the share price.I can see Centrica's annual dividend hike falling back closer to inflation, and I can see cover by earnings perhaps even dropping a little more.But if we were to see everything frozen in real terms from those 2015 forecasts and at today's share price, I'd still think an annual dividend yield of more than 5.5% per year even without any above-inflation share price growth would still be worth paying for - and I think that's a pessimistic scenario.

It's a bargain

In short, I see Centrica shares as oversold and too cheap now, and I reckon they should be in for a more-than-acceptable year.Verdict: Politics won't stop Centrica's profits in 2014!

[blanketstacker] 23/1/2014 19:32

Update due and confirmed for 20 Feb. Good luck to all.

[wipo1] 23/1/2014 18:22

Is there a trading update due soon?

[essentialinvestor] 22/1/2014 11:50

Regardless of Government there is going to be some margin compression,
hopefully this becomes clearer with the '14 outlook at the prelim announcement.

If news is better than feared the share price is significantly higher than current levels imo, barring a major market correction.

[mroalan] 22/1/2014 11:46

I, m sure things will improve when Winter shows up.

[portside1] 22/1/2014 08:04

this share is dirt cheap good div and can only go one au UP UP UP


over 5% div its a buy buy buy april 380p plus

[philo124] 21/1/2014 22:15

...the politics of envy.

[mxds] 21/1/2014 21:54

Why is anyone worried about Labour gaining power ?
With a leader who looks like road kill, a destructive economic policy and a history of f-ups...

[wipo1] 20/1/2014 23:14

Philo124 - I hope you are right, Labour are not good for stock markets all round,how many crashes under blair and brown!?

[philo124] 20/1/2014 23:04

Irrelevant as Miliband is un electable.

[wipo1] 20/1/2014 21:14

CNA and SSE seem to have faired a lot worse than their european competitors EDF and IBE(scottish powers spanish owner) since miliband opened his communist mouth.

[mitchy] 20/1/2014 00:37

On the 5 year chart the current trend looks very narrow and relatively easy to break out of I would imagine.But very difficult to say how far this trend will hold as there are so many area's we can see news coming from. Happy to be holding from 333 but would like to see the bleeding stopped.
Good Luck.

[champian] 17/1/2014 17:16

On an hour chart an inverted head & shoulder formation,next target 3.50

[1fox1] 17/1/2014 14:20

Hiya portside. I left you a note on the other dxns thread. Cheers.

[portside1] 17/1/2014 14:17

end of march 380p

[portside1] 17/1/2014 14:17

1fox1 you will have to be very lucky next leg up 350p

[1fox1] 17/1/2014 13:41

Hope it's a dead cat bounce cause I want to buy in at around £3-£3.10p :o)

[mitchy] 17/1/2014 10:34

The share price is moving in a very strange way today. Chinese building a stake as a prelude to a takeover? Share buyback has re-started?Or just a dead cat bounce?

[portside1] 16/1/2014 12:31

ex div april final div around 12p

[peeky] 16/1/2014 10:37

>> Milliband will NEVER get elected.

Im very grateful to Red Ed for creating this buying opportunity in utility stocks.

Like most buyers, I suspect, I am waiting for around 300p.

[pritijay] 16/1/2014 09:20

Hi Portside,
What date is the Divi declared? TIA

[portside1] 16/1/2014 08:48

added more at 317p missed 314p will now keep buying till 335p for the divs

[keith95] 15/1/2014 22:37

Likewize PHILO124 save the SIPP.

One should not forget:

"Centrica plc will return the proceeds from this sale to shareholders through a GBP420 million extension of its share repurchase programme, which will be conducted over the course of 2014. "


So I make that 2.6% of the available shares at current prices.