CenterPoint Energy, Inc. (CNP)

1. CenterPoint Energy, Inc. (CNP) Zachary Perconti

2. CenterPoint Energy, Inc.Recommendation: • Buy: Limit at $15.90 • Sell: $17.25

3. Ford Motor Company: Background • Electric and Natural Gas utility company serving customers in Arkansas, Oklahoma, Minnesota, Mississippi, Louisiana, and Texas • Fortune 500 company • Founded in 1882 • Reliant Energy seperated from CNP in 2002 • Approximately 8,800 employees • Operates in aforementioned areas under various names, including Minnegasco, Houston Lighting and Power (HL&P), Entex, and Arkla. • Headquartered in Houston, Texas

4. CNP: What They Do • Operates two interstate natural gas pipelines, which transported approximately 1.592 trillion cubic feet of natural gas in 2009. • Serves more than 5 million metered customers in the aforementioned areas. • Sells and delivers natural gas to over 3.2 million homes and businesses across their service area. • “Gathers” natural gas from extraction sites across the country (426 billion cubic feet in 2009) • Sells natural gas to approximately 11,000 commercial, industrial, and/or wholesale businesses in the Eastern United States

5. CNP: “Fast Facts” • Courtesy of CNP Website: http://www.centerpointenergy.com/about/companyoverview/fastfacts/

6. CNP: “Fast Facts” • Courtesy of CNP Website: http://www.centerpointenergy.com/about/companyoverview/fastfacts/

7. CNP: “Fast Facts” • Courtesy of CNP Website: http://www.centerpointenergy.com/about/companyoverview/fastfacts/

8. CNP : Basic Numbers • Current Price: $15.75 • P/E Ratio: 15.04 • Beta: 0.71 • Dividend/ Yield: 0.19/4.95 • EPS: $1.05 • 52-Week Low: $0.01 • 52-Week High: $17.00 • Market Cap: 6.67B Taken from http://www.google.com/finance?q=CNP as of 12/09/10

9. CNP: Recent News • In a shrewd PR move, CNP recently announced that they will be lowering the price of Natural gas in Mississippi this winter. • May cause people to be less thrifty with gas, increasing their profits • CNP has also been working on implementing a so-called “Intelligent Grid” in the Houston area, in order to maximize reliability and minimize the duration of power outages. • Recently partnered with ABB to do so.

10. CNP: Reasons to Buy • Average analyst price target of $17.54 (Zacks.com) • SmarTrend has CNP listed as on an Uptrend, stock has risen 8.8% since the Uptrend was issued. • Demand for natural gas increases in winter • Combined with price reduction – greater incentive to use heating at home, especially in northern states • Supplies industry with natural gas • Industrial companies provide a steady source of revenue unlikely to be interrupted • “Intelligent Grid” technology will allow CNP to save money in the long run • By reducing duration of outages and number of outages, will gain new customers in Texas and spend less restoring power. • They pay dividends! • Guaranteed some income ($0.195 per share as of 2010)

11. CNP: SRI • CNP has begun a direct mailer campaign to inform people about energy conservation • Rates a households gas usage with that of 100 of their neighbors within a certain radius, and sends a “home energy report” including that comparison along with a chart showing that month’s and last year’s usage. • Also provides tips as to how to conserve energy (replacing dirty air filters, weather-stripping doors and windows, etc) • Community involvement: • Sponsors various community activities, such as the Houston area World of Holiday Trees exhibit at the International Winter on the Waterway festival • Educates children about holiday traditions from around the world. • Also provides educational information about natural gas for the public and educators to use.

12. CNP: SRI • Has an extensive Community involvement and Social Responsibility program • Works with many charitable organizations (United Way, Habitat for Humanity, etc) for community initiatives and disaster relief • Organizes Blood drives, volunteer work, etc in Louisiana, Texas, etc • CNP employees regularly fundraise as a team in events such as March of Dimes, MS 150 bike tour, etc • CNP provides donations and coordinates additional fundraising efforts for Juvenile Diabetes Research foundation, United Negro College Fund, as well as many other nonprofit charity organizations • In Summary, they do a LOT for SRI!!! • FAR more than I could list here…the list just went on and on and on! Gah!

13. CenterPoint Energy, Inc. (CNP)“Always There”

14. CNP: Competition • The beauty of utility companies is that oftentimes they are granted public monopolies over their distribution network • While Texas deregulated their electric power grid in 2002, most other states that CNP operates in have not – as such, CNP is ensured a relatively steady revenue stream from their metered customers. • In summary, outside of Texas CNP has no real competition in the home consumer market.

15. Sources • http://www.centerpointenergy.com/home • http://www.prnewswire.com/news-releases/centerpoint-energy-customers-in-mississippi-should-expect-lower-natural-gas-bills-this-winter-111121299.html • http://www.rdmag.com/News/Feeds/2010/12/information-tech-centerpoint-energy-selects-abb-for-intelligent-gri/ • http://www.google.com/finance?q=CNP • http://www.zacks.com/research/get_news.php?id=343l4003 • http://fatcatwebproductions.com/the_paper/1532-centerpoint-energy-returns-sponsor-iwows-world-trees • http://finance-commerce.com/2010/12/centerpoint-pilot-marketing-hits-target/