CMS Energy Corporation
) has announced that it will pay an incremental dividend in the
first quarter of 2014. The board of directors has increased the
quarterly cash dividend rate by 5.9% year over year to 27 cents
per share. The increased dividend will be paid on Feb 28, 2014 to
stockholders of record as of Feb 7.
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On an annualized basis, the new dividend rate will be $1.08 per
share. The new annual dividend yield will be 4%, which will be
higher than the industry average of 2.3%.
CMS Energy's policy of paying incremental dividends supports its
commitment to improve long-term value for shareholders. This is
the eighth consecutive year of dividend increase. The last
dividend hike was made in Jan 2013 when it was increased 6.3% to
25.5 cents per share from the earlier payout of 24 cents per
In the long term, CMS Energy expects annual earnings growth to be
in the range of 5.0% to 7.0%. The company plans to continue to
increase its dividend with earnings growth.
The company's cash flow from operating activities during the
first nine months of 2013 was $1.1 billion while the cash balance
was $0.3 billion as of Sep 30, 2013. A strong financial position
helps CMS Energy to meet its anticipated cash requirements for
dividend payment and future projects.
Further, CMS Energy plans to invest approximately $7.0 billion in
the next five years to upgrade its distribution system and
generation assets including advanced metering infrastructure and
renewable investments. These initiatives would boost the
company's profitability in the long run, which in turn will
enable it to provide higher returns to its shareholders.
CMS Energy currently has a Zacks Rank #3 (Hold). However, some
better-ranked stocks in the same sector include
Wisconsin Energy Corp.
The AES Corporation
), each with a Zacks Rank #2 (Buy).