Shares in Centrica (LSE: CNA) have lost around 16% over the past 12 months as the company struggles with its turnaround. It had to ask shareholders for extra cash earlier this year to help pay down debt and fund acquisitions, but whether or not its problems are now behind it remains to be seen.

Much of the £750m raised through the equity placing earlier in the year will be returned to investors throughout the year in dividends. As a result, it’s unclear at this stage if Centrica will have to come back and ask investors for more cash to help fund its spending habits further down the road.

As a utility company, Centrica has the hallmarks of a defensive dividend stock. But with another possible fundraising on the cards, its dividend yield of 5.2% doesn’t seem to compensate investors effectively for the risk taken on. Simply put, there are better dividend stocks out there.

Wait and see

For the time being, it looks as if Gulf Keystone Petroleum (LSE: GKP) should still be avoided at all costs. However, after the company’s debt restructuring is complete, it might be worth revisiting GKP for another evaluation of its future prospects. 

Under the terms of its debt deal, which will see $500m of debt restructured, current shareholders will end up with just 5% of the company as a result of equity dilution. The deal also includes an open offer of $25m, giving existing shareholders the opportunity to acquire a further 5% of the stock leaving them with 14.5% of the firm after restructuring.  

If the debt restructuring goes through without a hitch, the company will emerge with $100m in debt, $25m in cash from the capital raising and $32.5m in cash previously held under debt covenant will be unlocked. What’s more, the company won’t be faced with onerous debt costs and will have the funds required to implement plans to maintain production at 40,000 barrels of oil per day at the Shaikan field. 

So, after the debt swap, Gulf Keystone will be well positioned for growth and investors might be better off waiting for the debt-for-equity swap to take place before building a position.

Expensive miner 

This time last year, investors and analysts were questioning whether or not Glencore (LSE: GLEN) could survive the commodity downturn. Twelve months on and it looks as if the company has managed to appease doubters with its debt reduction programme, asset sales, share offering and better-than-expected results.

Still, the company’s outlook remains dependent on commodity prices, and the outlook for commodities remains uncertain. So, it’s difficult to tell if shares in Glencore are attractive at current levels. 

The shares currently trade at a forward P/E of 45.1 and analysts have pencilled-in earnings per share growth of 46% for 2017. Even after this explosive growth, the shares don’t look cheap as they trade at a 2017 P/E of 32. Glencore’s shares have gained an impressive 92% year-to-date, but thanks to their premium valuation, it might be worth avoiding the company for now. 

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Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has recommended Centrica. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.