OGE OGE Energy Corp

CenterPoint Energy Inc. said Monday it was considering selling or spinning-off its investment in publicly traded Enable Midstream Partners and that it was exploring converting its own utility business to a REIT business model.

CenterPoint owns a 50% general-partner interest and a 55.4% limited-partner interest in Enable. The move to evaluate strategic alternatives comes after CenterPoint said Friday it was investing $363 million in Enable's preferred securities. The company said it was looking into doing a tax-free spinoff. CenterPoint and OGE Energy Corp. jointly control Enable.

"We are pleased with our investment in Enable," CenterPoint Chief Executive Scott M. Prochazka said. "We believe that now is the right time to explore options for unlocking the value of our strategic investment."

The Houston-based CenterPoint is a domestic energy delivery company that includes electric transmission and distribution, natural gas distribution and energy services.

The company's utility business made up about 17% of its profit in the most recent quarter. CenterPoint's exploration of the REIT conversion comes as the REIT structure has recently received "significant attention" in the Texas regulated utility industry, the company said. A REIT, which stands for real-estate investment trust, functions like other public companies, but they pay at least 90% of their corporate income to shareholders. REITs don't pay tax on the income they distribute but shareholders still do. The payouts are marketed as an attractive source of bond-like income.

CenterPoint Energy also updated its earnings forecasts. It expects 2015 earnings per share to be between $1.05 and $1.10, unchanged from previously released guidance, and 2016 earnings per share to be between $1.12 and $1.20. Analysts polled by Thomson Reuters had expected earnings per share of $1.06 in 2015 and $1.10 in 2016.

CenterPoint shares, which have fallen 37% in the last three months, were up 2.1% in light premarket trading. Companies in the energy sector have been hurt by low energy prices.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

February 01, 2016 09:15 ET (14:15 GMT)

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