Centrica Share Discussion Threads

[diku] 04/7/2019 14:37

Anybody think if Corbyn was to step down utility companies could stage a rally...change of policy under new leader...

[ted73] 04/7/2019 14:04

Plenty of money around

[portside1] 04/7/2019 14:01

Buynot sell at 88.1119 at 13 37 36

[portside1] 04/7/2019 14:00

My buy is down as a sell it is not it's a buy

[portside1] 04/7/2019 13:59

Just added another 5259 he who dares wins

[diku] 04/7/2019 13:58

porty...any bob hope here...

[ted73] 04/7/2019 13:34

Gets below run for your life

[ted73] 04/7/2019 13:33

Back to 83p

[justiceforthemany] 04/7/2019 12:47

Labour has slumped to 4th in a new poll. Corbyn and nationalisation looking less likely by the day.

[diku] 04/7/2019 09:45

Yes it is a learning process throughout our lives but some try to run before they can walk...

[sicker] 04/7/2019 09:21

diku, you've been here almost as long as me and I'm absolutely still learning :-)

[diku] 04/7/2019 08:38

jeannet...did you just drop out of the sky and landed on CNA thread?...newbie since 2018.. a lot to learn..

[silvergreyhead] 04/7/2019 08:06

.9 with BlackRock and .5 with Marshall the usual culprits, BlackRock unchanged since May and BlackRock upped theirs June 27th.
Regarding new homes and no Gas boilers surely Centrica sell electricity as well and will be quite ready to install Electric heating. There would still be millions of homes on gas boilers as well till 2050 no carbon emission year. As for Spirit wasn't there talk of spinning it off from Centrica or has that gone by the by now. As for Conn totally agree can't be getting away with it much longer surely

[gaffer73] 03/7/2019 22:59

Compared to what previously?

[whatsup32] 03/7/2019 19:12

Centrica now have 1.4% short position.

[jeannettetigger] 03/7/2019 18:06

Diku you are a silly billy.

[portside1] 03/7/2019 15:44

Diku all is well Just relax the sky is blue

[diku] 03/7/2019 14:47

But the pen is red now..

[jeannettetigger] 03/7/2019 10:03

Sorry I was thinking of liar liar.

[jeannettetigger] 03/7/2019 10:00

The pen is blue, the pen is blue!

[portside1] 03/7/2019 08:23

The sky is blue

[portside1] 02/7/2019 23:41

Tomorrow does not look blue

[la forge] 02/7/2019 17:33

CHEERS WHATUPS


Is the Centrica share price heading for 110p again?
[Fool.co.uk]
Alan Oscroft
Fool.co.uk2 July 2019
Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.
Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.

Centrica (LSE: CNA) has been regularly popping up in my stock filters these days, making me wonder if it’s finally time to buy. Shares in the owner of British Gas have recently fallen to a 21-year low, but can they really keep on sliding?

What do I mean by stock filters? I regularly run a scan of the FTSE 100, checking on various fundamental measures. I look for stuff like low P/E, high dividends, good dividend cover, low PEG, all kinds of things. And, increasingly, Centrica makes the cut.

Looking for undervalued dividend stocks, the other day I narrowed the FTSE 100 down to those with a dividend yield of 5% or more, cover by earnings of at least 1.3 times, and a P/E that’s no higher than 14. And Centrica made the cut.
Earnings rebound?

Earnings at Centrica are expected to fall again this year, but analysts have EPS starting to climb again in 2020. That would put the stock on a forward P/E of around 11 for the current year, dropping as low as 8.5, based on next year’s forecasts.

There’s a dividend cut on the cards for this year too, after the firm had maintained its 12p per year for four years in a row while earnings were falling. And as an aside, that’s something I don’t like to see — companies that stubbornly keep their dividends going until it’s almost too late. Sadly, it’s a very common thing. But I’d much rather see dividends paid more variably as, and when, the cash is there to cover them reliably.

Anyway, even with forecasts suggesting the payout will be slashed to around 7.8p this year, and then nudged down to 7.5p next, that would still provide yields of 8.7% and 8.3% for the two years, respectively.
Dividend cover

Cover by earnings wouldn’t be great. But we’d be seeing 1.33 times by 2020, if these predictions are close to the truth, and that wouldn’t be too bad in the energy sector where dividends are generally only modestly covered.

This isn’t a picture of a company bouncing with health I’m painting here. But, at the same time, it looks like it could be passing the bottom of its poor spell. I can’t help feeling there’s more pessimism in the share price than is justified.

Let’s imagine a 25% upside and a share price rising to 112p. That would bring those P/E predictions to undemanding levels of 14 and 11 for the two years, respectively, and the dividend yields would drop to 7% and 6.7%. That would still represent a very desirable income level.
Trading

In its most recent trading update in May, Centrica told us things remain tough, but that it’s still on track for its cash flow and net debt guidance, with £250m of efficiency savings and £500m of non-core divestments expected by the end of the year.

Net debt should still be around £3bn-£3.5bn, and I see that as the biggest risk right now. Interim results are due on 30 July, and debt will be the first thing I’m looking for.

Would I buy Centrica shares? No, because of my cautious investing approach, and because these days I won’t buy recovery stocks until I’ve seen them recover. But for a bolder contrarian investor, I reckon Centrica could be worth a close look now.