Proactive Investors - British Gas owner, Centrica (LON:CNA), could return up to £4.5 billion to investors by 2026, according to research from Barclays (LON:BARC).
The broker made the prediction after running the numbers on Centrica’s cash flow and debt in the years ahead.
“With infrastructure cashflow of around £1 billion covering the £1 billion dividends through to 2026, we estimate annual net cash rising by c.£500 million per annum after dividends, reaching a net cash position of £3.5 billion by December 2026,” the broker said in a note.
“Return of this cash together with the £1 billion dividend payout would result in £4.5 billion returned to shareholders, or a return of 60% of the current market capitalisation by December 2026,” Barclays added.
The broker has raised its price target to 200p from 160p. It sees sustainable earnings in core division of around £800 million from 2026 equivalent to EPS of 11-12p.
Barclays rating of overweight remains unchanged. Shares in Centrica were 1% lower at 137.59p reflecting the weak overall market.