Cms Energy Corp (NYSE: CMS)

Sector: Utilities Industry: Utilities - Regulated Electric CIK: 0000811156
Market Cap 22.86 Bn
P/B 2.50
P/E 21.54
P/S 2.68
ROIC (Qtr) 4.94
Div Yield % 2.85
Rev 1y % (Qtr) 12.27
Total Debt (Qtr) 18.90 Bn
Debt/Equity (Qtr) 2.07
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About

CMS Energy Corporation, often recognized by its ticker symbol CMS, is a prominent player in the energy industry, primarily based in Michigan. This company serves as the parent holding company for various subsidiaries, including Consumers, an electric and gas utility, and NorthStar Clean Energy, a domestic independent power producer and marketer. CMS Energy's main business activities revolve around the production and distribution of energy, with a focus on electricity and natural gas. The company's operations span across multiple regions, primarily...

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Investment thesis

Bull case

  • Tangible assets of 39.94B provide robust 33.62x coverage of other current liabilities 1.19B, indicating strong asset backing.
  • Operating cash flow of 2.23B provides solid 0.63x coverage of current liabilities 3.55B, showing strong operational health.
  • Operating cash flow of 2.23B provides strong 2.83x coverage of inventory 791M, indicating efficient inventory management.
  • Tangible assets of 39.94B provide robust 11.26x coverage of current liabilities 3.55B, showing strong asset backing.
  • Tangible assets of 39.94B provide robust 29.78x coverage of receivables 1.34B, showing strong asset quality.

Bear case

  • Operating cash flow of 2.23B barely covers its investment activities of (4.04B), with a coverage ratio of -0.55, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 2.23B provides thin coverage of dividend payments of (663M) with a -3.37 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of (1.59B) provides weak coverage of capital expenditures of 3.82B, with a -0.42 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 2.62B show weak coverage of depreciation charges of 1.31B, with a 2.01 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of (1.59B) represents just -0.66x of debt issuance 2.39B, suggesting concerning reliance on leverage rather than internal cash generation for growth.

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Utilities - Regulated Electric
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NEE Nextera Energy Inc 191.44 Bn 28.01 6.98 95.62 Bn
2 SO Southern Co 97.42 Bn 30.98 4.46 73.75 Bn
3 AEP American Electric Power Co Inc 64.38 Bn 33.83 4.24 0.00 Bn
4 DUK Duke Energy CORP 56.47 Bn 30.61 3.87 89.65 Bn
5 EXC Exelon Corp 48.53 Bn 17.53 2.00 50.08 Bn
6 ETR Entergy Corp /De/ 45.74 Bn 25.29 3.59 30.45 Bn
7 PEG Public Service Enterprise Group Inc 43.93 Bn 35.35 4.41 23.51 Bn
8 XEL Xcel Energy Inc 41.10 Bn 37.21 3.75 35.52 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.01 1.01
EV to Cash from Ops. EV/CFO 18.12 12.45
EV to Debt EV to Debt 2.14 171.92
EV to EBIT EV/EBIT 15.46 19.12
EV to EBITDA EV/EBITDA 11.42 15.67
EV to Free Cash Flow [EV/FCF] EV/FCF -25.49 -28.25
EV to Market Cap EV to Market Cap 1.77 1.84
EV to Revenue EV/Rev 4.74 4.72
Price to Book Value [P/B] P/B 2.50 2.60
Price to Earnings [P/E] P/E 21.54 18.53
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.58 1.94
Dividend Payout Ratio % Div Payout % (Qtr) 61.40 62.23
Dividend per Basic Share Div per Share (Qtr) 2.17 2.02
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -41.54 -218.37
Interest Coverage Int. cover (Qtr) 3.32 2.83
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -26.71 -68.90
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 245.51 73.92
Dividend Growth (1y) % Div 1y % (Qtr) 40.39 4.05
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 7.15 15.47
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 10.50 13.33
EBIT Growth (1y) % EBIT 1y % (Qtr) 10.55 15.81
EBT Growth (1y) % EBT 1y % (Qtr) 10.17 19.29
EPS Growth (1y) % EPS 1y % (Qtr) 5.69 21.26
FCF Growth (1y) % FCF 1y % (Qtr) -145.22 -35.52
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 10.50 11.97
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.21 0.22
Cash Payout Ratio Cash Payout (Qtr) 0.11 0.11
Cash Ratio Cash Ratio (Qtr) 0.17 0.98
Current Ratio Curr Ratio (Qtr) 0.98 2.72
Debt to Equity Ratio Debt/Equity (Qtr) 2.07 1.45
Interest Cover Ratio Int Coverage (Qtr) 3.32 2.83
Times Interest Earned Times Interest Earned (Qtr) 3.32 2.83
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 46.00 37.94
EBIT Margin % EBIT Margin % (Qtr) 30.67 316.94
EBT Margin % EBT Margin % (Qtr) 21.43 14.36
Gross Margin % Gross Margin % (Qtr) 41.50 41.20
Net Profit Margin % Net Margin % (Qtr) 12.40 12.57