During the intraday trading on Apr 15, 2014, share prices of
CMS Energy Inc.
) reached a 52-week high of $30.00 per share, primarily backed by
its dividend announcement, finally closing a notch lower at
$29.98. With a market cap of roughly $8.0 billion, CMS Energy
shares have increased 15.3% so far this year. The average volume
traded over the last three months is around 2.3 million.
CMS Energy has rewarded shareholders by returning a substantial
portion of the free cash flow through incremental dividends over
the past three years. Currently, the company pays a quarterly
dividend on its common stock of 27 cents per common share. This
represents a $1.08 annualized dividend and a dividend yield of
3.60%, making the stock attractive for investors.
As a core utility portfolio holding, CMS is a pure-play regulated
utility with reliable execution and lower risk. The Michigan
Public Service Commission (MPSC) has agreed to base its rate case
request on a forward test year instead of a historical test year,
as in other parts of the country. The company also has a
regulatory provision to self-implement its requested rate hike
for 6 months after filing. The regulatory body also has to decide
on the rate case within one year of the filing, or before the
proposed rates become permanent.
Again, the company registered a 48% year-over-year improvement in
its bottom line during the fourth quarter of 2013 reflecting its
focus on efficiency. With its robust pipeline of regulated
investment opportunities and favorable regulatory treatment, the
company remains on track to achieve its long-term bottom-line
growth target of 5% to 7% and annual rate base growth of 6% to
7%. The strong rate base growth is also expected to extend into
the next decade as the company projects 2018-2022 capital
expenditure of $8.0 billion.
CMS Energy also tightened the 2014 earnings guidance range to
$1.74-$1.78 per share from its earlier projection of $1.73-$1.78.
This will be backed by the company's impressive infrastructure.
The company already plans to spend approximately $7.0 billion in
the 2013-2017 time frame to upgrade its distribution system and
generation assets through projects such as advanced metering
infrastructure (AMI) and renewable (wind) investments.
This Jackson, MI-based company is also working to reduce its
costs as part of its Promise to Michigan program. This program
aims at providing affordable and reliable services to its
customers. The company has lowered its fuel costs by 44% over the
past five years.
CMS Energy currently holds a Zacks Rank #2 (Buy). Some other
stocks worth considering in the sector include
Public Service Enterprise Group Inc.
NRG Energy, Inc.
NRG Yield, Inc.
). All these stocks sport a Zacks Rank #1 (Strong Buy).
CMS ENERGY (CMS): Free Stock Analysis Report
NRG ENERGY INC (NRG): Free Stock Analysis
NRG YIELD INC-A (NYLD): Free Stock Analysis
PUBLIC SV ENTRP (PEG): Free Stock Analysis
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