CMS Energy Corporation
) has increased its dividend by 6.25%, bringing the annualized
dividend to $1.02 per share from the previous payout of 96 cents
per share. The 6 cents increase in the annual dividend reflects
successful execution of the company's business strategy.
CMS Energy will now pay a quarterly dividend of 0.255 cents per
share compared with the prior quarterly dividend of 24 cents per
share. The announced first quarter dividend will be paid on Feb
28, 2013, to shareholders of record at the close of business on
Feb 8, 2013.
This is the seventh dividend increase of CMS Energy. The company
has increased its last quarterly dividend by 3 cents from 21
cents to 24 cents in Jan 2012. The current dividend payout brings
the annual dividend yield to 4.04%. The increase will keep CMS
Energy's payout ratio in line with the average of its utility
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 increase in earnings.
Besides paying substantial dividends, CMS Energy intends to
benefit its customers and shareholders by making capital
investments. Currently, the company plans to invest approximately
$7 billion in its operations through 2017. Apart from improving
the environment, these investments would bring in operational
In order to move in line with its strategy, CMS Energy recently
announced that it intends to build a 700 megawatt ("MW") new
natural gas-fired power plant in Genesee County. The estimated
cost of the project is $750 million.
Jackson, Michigan-based CMS Energy is the holding company of
Consumers Energy Company (Consumers) and CMS Enterprises Company
(Enterprises). Consumers is a electric and gas utility company
that provides electricity and natural gas to Michigan's
residents, and serves customers in all 68 counties of Michigan's
CMS Energy is expected to release its fourth quarter and full
year 2012 results on Feb 18, 2013. The Zacks Consensus Estimates
for fourth quarter and full year 2012 currently stands at 24
cents per share and $1.54 per share, respectively.
CMS Energy expects to have sufficient capacity and sources of
liquidity to fund its investment-based growth plans going
forward. Going forward, key growth drivers of the company include
its stable electric and gas utility operations, favorable
regulatory policies in Michigan, higher rates and incremental
However, unfavorable macro backdrop, lower demand for electricity
and pending regulatory cases remain a matter of concern. The
company presently retains a short-term Zacks Rank #3 (Hold).
Other energy providers that have recently increased their
dividend to compete within the industry are
CenterPoint Energy, Inc.
) that increased its dividend by 2.5%,
) raised its dividend by 3.3% and
Dominion Resources Inc.
) upped its dividend by 6.6%.
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