Are Centrica Shares Buy or Sell?
In this article, we take a look at investing in Centrica shares, analysing the buy and sell cases. We will also examine the Centrica dividend history and highlight the Centrica share price forecast according to analysts. So, if you are wondering “are Centrica shares buy or sell?” – you have come to the right place.
Table of Contents
What Is Centrica?
Centrica, which owns British Gas, is a UK energy company which supplies electricity and gas to more than 10 million customers in the UK and Ireland. In the UK, Centrica is the largest domestic supplier of gas and one of the largest suppliers of electricity.
Centrica Shares Buy or Sell
So, are Centrica shares buy or sell? In the following sections, we will highlight the buy and sell cases for Centrica shares.
Buy
Centrica shares were in a long-term decline prior to the outbreak of the pandemic in 2020. However, after hitting an all-time low in April 2020, this trend reversed. In the four years ending 31 July 2024, Centrica shares gained more than 170%, comfortably outpacing the wider FTSE 100’s 42% over the same period.
However, despite these impressive gains, Centrica shares look cheap compared to many other FTSE 100 companies, trading at around 4 times its adjusted earnings at the time of writing. This could be an indication that there is further opportunity for share price growth ahead.
The company also has a very healthy looking balance sheet. As of the 30 June 2024, Centrica had £3.2 billion net cash on its books, providing the company with a big buffer to help deal with any potential headwinds in the future.
Furthermore, Centrica is a dividend paying stock, which will appeal to income investors who like to generate income from their investments. Currently, Centrica shares have a dividend yield of 3.4%.
Sell
Whilst Centrica shares may seem attractively priced, this may be investors attempting to price in potential future headwinds. But what could those headwinds be?
As an energy supplier, Centrica’s performance can be largely impacted by energy prices. Whilst this may have been to the company’s advantage as energy price soared in 2022, it has also felt the effect of prices falling. In the first half of 2024, adjusted operating profit dropped by 50% from the previous year.
In fact, Centrica’s low valuation is likely to be a reflection that investors expect profits to retreat even further in the future.
Looking at the long-term, as the UK transitions towards net-zero emissions, natural gas use is likely to decline over time which, as things stand, would effect Centrica’s business. However, in anticipation of this, Centrica plans to invest between £600 million and £800 million a year until 2028 in renewable generation.
Centrica Dividend History
As we mentioned when analysing the buy case for Centrica stock, the company pays dividends to shareholders.
Whilst Centrica used to have an impressive history of paying and increasing annual dividend payments to shareholders, it slashed its annual dividend in 2014, doing the same thing again in 2019, before halting dividends in 2020 in response to the Covid-19 pandemic. Dividends were resumed in 2022.
The table below shows the Centrica dividend history since the year 2000.
Centrica Share Price Forecast 2024
What do the analysts currently think about investing in Centrica? Out of nine analysts providing a Centrica share price forecast in the last three months, all nine give the stock a buy rating.
The highest Centrica share price forecast gives a 12-month price target of 190.00p, whilst the lowest target was 155.00p. The average Centrica stock forecast was 175.71p.
How to Buy Centrica Shares
With an investing account from Admiral Markets, you can buy Centrica shares in 5 steps:
- Open an Invest.MT5 account.
- Log into the Dashboard.
- Open the web trading platform.
- Search for Centrica shares and click the symbol to open a chart.
- Create a new order, enter the desired number of shares and click ‘Buy’!
Invest with Admirals
With an investing account from Admirals you can buy shares in Centrica and more than 4,500 other companies around the world. Furthermore, clients of Admirals benefit from:
- Regular market news and analysis.
- Low minimum deposit of €1 and no account maintenance fees.
- The ability to buy fractional shares in more than 700 of the world’s most exciting companies.
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FAQ
When was British Gas privatised?
British Gas was privatised on 8 December 1986, when its shares were floated on the London Stock Exchange.
When did Centrica buy British Gas?
In 1997, British Gas split into three separate companies, one of which was Centrica.
Can you buy British Gas shares?
British Gas is a subsidiary of Centrica. Whilst it’s not possible to buy shares in British Gas, it is possible to gain exposure to the company by buying shares in Centrica.
When is Centrica dividend due?
Centrica currently declares two dividends each year. The interim dividend is paid in November and the final dividend is paid in June/July.
INFORMATION ABOUT ANALYTICAL MATERIALS:
The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following:
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- The Analysis is prepared by an independent analyst Roberto Rivero, Freelance Contributor (hereinafter "Author") based on personal estimations.
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