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Centrica offers safety in numbers

As competitors leave the market, the electricity supplier’s defensive qualities look undervalued
March 3, 2022

If the past few days have taught us anything, it is that safety and security have a value in times of upheaval.

Tip style
Value
Risk rating
Medium
Timescale
Medium Term
Bull points
  • Strongest player in a consolidating market
  • Balance sheet now in net cash position
  • Utility offers defensive qualities
  • Low PEG ratio implies cheapness
Bear points
  • Service arm has not performed well
  • Upstream still accounts for most profits

This is as true for the domestic energy sector as it is for investors looking for the best home for their money on global financial markets, and is one reason why British Gas parent Centrica (CNA) has been the focus of so many upgrades in brokers’ earnings forecasts in recent months.

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