Vanguard Capital Management has taken a significant passive position in CenterPoint Energy, disclosing ownership of 49.4 million shares, or a 7.56% stake, according to a Schedule 13G filing with the SEC on April 29. The filing indicates Vanguard holds sole voting power over approximately 6.9 million shares and sole dispositive power over the entire position, marking a notable institutional vote of confidence in the Houston-based utility.
Schedule 13G filings are typically used by passive investors who hold more than 5% of a company's voting shares, signaling investment rather than activist intent. This move by Vanguard underscores the growing appeal of regulated utilities with exposure to the surging demand from data centers and industrial electrification.
CenterPoint Energy reported first-quarter net income of $316 million, or $0.48 per share, up from $297 million, or $0.45 per share, in the same period last year. The company also declared a quarterly dividend of $0.23 per share, payable on June 11 to shareholders of record as of May 21, reaffirming its status as a reliable income stock.
CEO Jason Wells highlighted that Houston Electric has secured 12.2 gigawatts of new load commitments, with 8 gigawatts from data centers expected to come online by 2029. "Houston is firmly established as a location of choice for large-scale hyperscaler clients," Wells said in comments to Reuters, emphasizing that expanding grid connections is key to maintaining affordable electricity.
The Vanguard filing follows other notable institutional moves. UBS Group increased its stake by 31.3% in the fourth quarter, holding 7.26 million shares valued at approximately $278.4 million. Jennison Associates also raised its position by 19.4% to 7.72 million shares, worth about $296.1 million. However, investors should note that 13F filings reflect holdings as of quarter-end and may not represent current positions.
CenterPoint's shares traded near $43.65 before Friday's open, giving the company a market capitalization of roughly $28.8 billion. The stock has been hovering near recent highs, as utility-focused investors monitor shifts in institutional ownership and the company's evolving growth narrative.
The broader utility sector has seen a strong rally, with U.S. utility stocks posting their best first-quarter performance since 2019, driven by demand from artificial intelligence and data center expansion. "A lot of the performance is likely going to be tied to utilities' industrial customer base," said Gerry Sparrow, president of Sparrow Capital Management. Other utilities active in the data center corridor include American Electric Power, NextEra Energy, and Duke Energy.
Despite the positive sentiment, risks remain. CenterPoint's forward-looking statements caution that demand forecasts, regulatory cost recovery, project execution, weather variability, financing conditions, and grid investment timing could all impact results. If data center construction slows or regulators tighten cost recovery, the institutional bets could face headwinds.
For now, the filings suggest that major investors are sticking with CenterPoint as its growth story increasingly hinges on converting Houston's industrial pipeline into actual connected load, rather than just signed agreements. The company's regulated model and dividend yield continue to attract those seeking both income and exposure to the AI-driven power demand theme.
