On Apr 12, 2013, shares of
CMS Energy Corporation
) hit a 52-week high of $28.76. CMS Energy registered positive
earnings surprises in the last three quarters, with an average
beat of 3.75%.
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In 4Q12, the company reported strong results, with earnings of 25
cents per share increasing 56.3% from the 4Q11 level. Total
revenue of $1.67 billion surpassed the year-ago figure of $1.62
billion by 3.1%.
CMS Energy continues to strengthen its distribution system and
generation assets through projects such as advanced metering
infrastructure (AMI) and renewable (wind) investments. The
company has plans to spend $6.5 billion over the 2013 to 2017
We expect these regulated investments will allow the company to
achieve its long-term EPS growth target of 5% to 7%. CMS Energy
is also planning to reduce its operation and maintenance
expenses, which will have a positive impact on margins.
The strong performance of the company is expected to continue in
2013 as well. CMS Energy expects earnings per share for 2013 in
the range of $1.63 to $1.66, surpassing the 2012 mark.
We expect long-term earnings growth of 5.97%. The Zacks Consensus
Estimates for 2013 and 2014 are $1.65 and $1.74, respectively.
This reflects year-over-year growth of 6.22% in 2013 and 5.96% in
The present valuation also makes the company attractive. Shares
of CMS Energy Corporation currently trade at 17.45x 12-month
forward earnings, an 8.4% discount to the peer group average of
19.05x. In addition, ROE of the company is 13.3%, higher than the
peer group average of 8.2%.
The company has consistently paid dividends to its shareholders
and has raised its quarterly dividend seven times in as many
years. The incremental dividend reflects the strength and
successful execution of the company's business strategy. The
current annual dividend is $1.02 per share.
CMS Energy currently carries a Zacks Rank #2 (Buy). Besides CMS
Energy other electric utilities like
Brookfield Infrastructure Partners L.P.
Huaneng Power International, Inc.
Empresa Nacional de Electricidad S.A.
) are also performing well and currently have a Zacks Rank #1(
Based in Jackson, Mich., CMS Energy was founded in 1987. The
company primarily operates in Michigan and has three operating
segments, namely, Electric Utility, Gas Utility, and