The Centrica (LSE: CNA) share price gained 1.4% this morning (24 July), after the company reported falling first-half profits.

Adjusted operating profit fell to £549m from £1,035m in the first half last year, while adjusted EBITDA dropped to £900m from £1,437m.

The update said: “The first half of 2025 has seen more challenging conditions … with lower commodity prices and spreads impacting our Infrastructure businesses.” Warmer weather also took its toll.

Shareholder returns

The company lifted its interim dividend 22% to 1.83p, saying it expects the full-year payout to grow by the same percentage to 5.5p. Cover by earnings should “move to around 2x by 2028.” On top of that, the current £2bn share buyback continues, with £0.5bn outstanding by the end of June. It should be complete by the end of 2025.

Does Centrica sound like a cash cow? We must remember the forecast dividend yield is only a modest 2.8%, with plenty of bigger ones to be had. Still, share buybacks should lift future per-share earnings and dividend measures.

Centrica has probably one of the clearest views of likely future financials than most in the FTSE 100. Many investors wisely priortise long-term dividend dependability over short-term higher yields.

And with the Centrica share price up 240% in the past five years, shareholders have done well.

Some uncertainty

No dividend can ever be guaranteed. And the outlook is still a fair way from certain. Among its current risk factors, the company names “US tariffs, EU regulation, and geopolitics“.

But there’s a bit of diversification away from gas. Centrica has agreed to take a 15% stake in the UK’s new Sizewell C nuclear project. Its total funding obligation is capped at £1.3bn. And the board predicts a 10.8% return on equity in the early stages.

That does highlight the main long-term concern. The world will presumably get back to moving away from fossil fuels eventually. I just don’t see the end of oil and gas coming any time soon. Possibly not for a good few decades yet.

Still good value?

Despite that cracking five-year performance from the share price, we’re still only looking at a forecast price-to-earnings (P/E) ratio of 12. And if we account for the £1.9bn net cash predicted for the end of 2025, we’d get an enterprise-adjusted P/E of only nine.

On that basis, the stock looks temptingly good value to me. But against it, forecasts indicate a 12.5% decline in earnings per share between 2025 and 2027. That could raise the P/E close to 14 by then. And still around 12.3 if we adjust for predicted net cash, falling to £860m.

Back to the bright side, dividends are expected to grow 33% over the same two-year period. And even if earnings decline as predicted, we’d still see cover of about 1.6 times. That might make me a bit nervous. But it depends on how the outlook develops over the next few years.

If the future turns upwards, Centrica could still be undervalued. I reckon it’s one worth considering for investors seeking long-term stability — but with a careful eye on the next year or two.