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CMS Energy (CMS) Rewards Shareholders With 5.7% Dividend Hike
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CMS Energy Corporation (CMS - Free Report) recently announced that its board of directors has approved an increase in quarterly dividend to 46 cents per share, reflecting an increase of 5.7% from 43.50 cents.
With this approval, CMS Energy now boasts an annualized dividend yield of 2.9% based on its share price worth as of Jan 31, 2022. This compares with the Utility - Electric Power industry's yield of 3.08% and S&P 500's yield of 1.37%.
This move reflects not only the financial strength of the company but also its ability to deploy capital effectively.
Can CMS Energy Retain Its Share Buyback Program?
Returning cash to shareholders is buoyed by a company’s ability to generate enough sales in the business and maintain liquidity. In this context, it is worth mentioning that CMS Energy’s sales rose 14.5% on a year-over-year basis in the last reported quarter. Moreover, the company generated cash from operating activities worth $1,483 million in the first nine months of 2021 compared with $1,144 million in the same period last year, thus exhibiting its solid liquidity position.
Meanwhile, CMS had cash and cash equivalents of $102 million as of Sep 30, 2021, up from $32 million at the end of 2020, reflecting the company’s strength in the business and its ability to generate enough cash from various business lines.
The company expects to generate earnings in the range of $2.85-$2.87 per share in 2022 and targets achieving long-term adjusted earnings per share growth toward the high end of 6%-8%.
In this context, it is worth mentioning that CMS Energy anticipates growing on earnings, backed by its various investment plans that boast a strong return value. Also, the company expects to generate cost savings of more than $40 million through its Consumers Energy Way, which will be used to deploy various growth-generating projects to boost returns. This would likely assist the company in returning value to its shareholders and achieving its long-term dividend per share growth in the range of 6%-8%. The latest dividend hike is a testament to this.
Also, improved demand for utility services from residential, consumer and industrial groups is likely to benefit U.S utility companies. Per the U.S. Energy Information Administration, U.S. retail electricity sales are likely to increase by 0.6% in 2022 and 1.4% in 2023. Such growth forecast implies improved economic conditions that could benefit utility companies like CMS Energy and enable them to grow their earnings.
The aforementioned factors make one confident that CMS can maintain its liquidity position in the long haul, thereby assisting in returning excess cash to its shareholders.
Peer Moves
Supported by consistent cash flows, utility companies who pay regular dividends to their shareholders in a bid to boost shareholder returns are:
On Jan 4, 2022, Duke Energy (DUK - Free Report) declared quarterly cash dividend on its common stock of $0.985 per share. Currently, Duke Energy boasts an annualized dividend yield of 3.76% based on its share price as of Jan 31, 2022. It has paid cash dividends on its common stock for 96 consecutive years.
The long-term earnings growth rate of Duke Energy is pegged at 5.3%. Shares of DUK have returned 12.8% in the past year.
On Sep 30, 2021, CenterPoint Energy (CNP - Free Report) announced that its board of directors has approved a hike in its quarterly dividend to 17 cents per share, reflecting an increase of 6.3% from the prior payout. With this hike, the company will now pay annual dividend of 68 cents per share.
CenterPoint boasts a long-term earnings growth rate of 4.7%. Shares of CNP have returned 33.5% in the past year.
On Oct 15, 2021, NextEra Energy’s (NEE - Free Report) board of directors declared regular quarterly common stock dividend of $0.385 per share. Currently, the company boasts an annualized dividend yield of 2.12% based on its share price as of Jan 31, 2022.
NextEra Energy’s long-term earnings growth is pegged at 8.8%. The Zacks Consensus Estimate of NEE’s 2022 earnings suggests an improvement of 8.5% from the prior-year figure.
Price Movement
In the past year, shares of CMS Energy have rallied 12.1% compared with the industry’s growth of 4.9%.
Image: Bigstock
CMS Energy (CMS) Rewards Shareholders With 5.7% Dividend Hike
CMS Energy Corporation (CMS - Free Report) recently announced that its board of directors has approved an increase in quarterly dividend to 46 cents per share, reflecting an increase of 5.7% from 43.50 cents.
With this approval, CMS Energy now boasts an annualized dividend yield of 2.9% based on its share price worth as of Jan 31, 2022. This compares with the Utility - Electric Power industry's yield of 3.08% and S&P 500's yield of 1.37%.
This move reflects not only the financial strength of the company but also its ability to deploy capital effectively.
Can CMS Energy Retain Its Share Buyback Program?
Returning cash to shareholders is buoyed by a company’s ability to generate enough sales in the business and maintain liquidity. In this context, it is worth mentioning that CMS Energy’s sales rose 14.5% on a year-over-year basis in the last reported quarter. Moreover, the company generated cash from operating activities worth $1,483 million in the first nine months of 2021 compared with $1,144 million in the same period last year, thus exhibiting its solid liquidity position.
Meanwhile, CMS had cash and cash equivalents of $102 million as of Sep 30, 2021, up from $32 million at the end of 2020, reflecting the company’s strength in the business and its ability to generate enough cash from various business lines.
The company expects to generate earnings in the range of $2.85-$2.87 per share in 2022 and targets achieving long-term adjusted earnings per share growth toward the high end of 6%-8%.
In this context, it is worth mentioning that CMS Energy anticipates growing on earnings, backed by its various investment plans that boast a strong return value. Also, the company expects to generate cost savings of more than $40 million through its Consumers Energy Way, which will be used to deploy various growth-generating projects to boost returns. This would likely assist the company in returning value to its shareholders and achieving its long-term dividend per share growth in the range of 6%-8%. The latest dividend hike is a testament to this.
Also, improved demand for utility services from residential, consumer and industrial groups is likely to benefit U.S utility companies. Per the U.S. Energy Information Administration, U.S. retail electricity sales are likely to increase by 0.6% in 2022 and 1.4% in 2023. Such growth forecast implies improved economic conditions that could benefit utility companies like CMS Energy and enable them to grow their earnings.
The aforementioned factors make one confident that CMS can maintain its liquidity position in the long haul, thereby assisting in returning excess cash to its shareholders.
Peer Moves
Supported by consistent cash flows, utility companies who pay regular dividends to their shareholders in a bid to boost shareholder returns are:
On Jan 4, 2022, Duke Energy (DUK - Free Report) declared quarterly cash dividend on its common stock of $0.985 per share. Currently, Duke Energy boasts an annualized dividend yield of 3.76% based on its share price as of Jan 31, 2022. It has paid cash dividends on its common stock for 96 consecutive years.
The long-term earnings growth rate of Duke Energy is pegged at 5.3%. Shares of DUK have returned 12.8% in the past year.
On Sep 30, 2021, CenterPoint Energy (CNP - Free Report) announced that its board of directors has approved a hike in its quarterly dividend to 17 cents per share, reflecting an increase of 6.3% from the prior payout. With this hike, the company will now pay annual dividend of 68 cents per share.
CenterPoint boasts a long-term earnings growth rate of 4.7%. Shares of CNP have returned 33.5% in the past year.
On Oct 15, 2021, NextEra Energy’s (NEE - Free Report) board of directors declared regular quarterly common stock dividend of $0.385 per share. Currently, the company boasts an annualized dividend yield of 2.12% based on its share price as of Jan 31, 2022.
NextEra Energy’s long-term earnings growth is pegged at 8.8%. The Zacks Consensus Estimate of NEE’s 2022 earnings suggests an improvement of 8.5% from the prior-year figure.
Price Movement
In the past year, shares of CMS Energy have rallied 12.1% compared with the industry’s growth of 4.9%.
Zacks Rank
CMS Energy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.