Reports that the firm, which today reported operating profits of £1.3bn in the six months to 30 June, is set to raise gas prices by 18 per cent and electricity prices by 16 per cent in August, have been met by fierce criticism by the British public.
However, pain for customers could translate into rewards for shareholders.
Although Centrica’s growth has been relatively stagnant in the last 12 months, Raynor thinks this news-flow bodes well for the long-term prospects of the company.
"Earnings are expected to be lower than in 2010 – apparently consumers are feeling the pinch and so are using less gas and electricity," he explained. "Profits from its gas-storage facility will be lower than last year and in the area that Centrica is looking to make most of its money, the exploration side, this is expected to be hit by the Government’s new North Sea tax."
"However, as utilities go, this is still a solid play, the yield is attractive and even if growth is stifled this year we do not doubt that we will see a turnaround very shortly. Our advice to investors is that they should continue to buy."
According to FE Analytics data, Centrica has returned 34.69 per cent in the last five years, outperforming the FTSE 100 index by 15.92 per cent.
Performance of stock vs index over 5-yrs
Source: FE Analytics
In the last 12 months, the company has returned 8.76 per cent – 4 per cent less than the FTSE 100.
It appears on The Share Centre’s buy-list, and is one of the highest-rated stocks. Of a selection of 21 brokers, 10 view Centrica as a strong buy, five view it as a buy, three are neutral and only three think investors should sell.
The stock is widely held by fund managers, but it is by no means the most popular in the industry. According to FE Analytics data, of 2,690 funds in the IMA unit trust and OEIC universe, 63 hold Centrica in their top-10.
Centrica appears in the top-10 holdings of a quarter of funds in the IMA UK Equity Income sector, including the £3.9bn Artemis Income fund.
Eleven funds have more than 4 per cent of their portfolio invested in the stock. Aberdeen UK Equity Income, which has £158m assets under management (AUM), has a 6.1 per cent weighting to Centrica.
Performance of fund vs sector over 5-yrs
Source: FE Analytics
According to FE Analytics data, the fund has returned 17.78 per cent in the last three years, outperforming its UK Equity Income sector average by 4.23 per cent.